Corporate social responsibility, employee commitment and organizational performance in banking industry in Thai Nguyen province

CORPORATE SOCIAL RESPONSIBILITY, EMPLOYEE

COMMITMENT AND ORGANIZATIONAL PERFORMANCE IN

BANKING INDUSTRY IN THAI NGUYEN PROVINCE

A DISSERTATION PAPER

Presented to

School of Graduate Studies

Central Philippine University, Philippines

In Collaboration with

Thai Nguyen University, Vietnam

In Partial Fulfillment

Of the Requirements for the Degree

DOCTOR OF MANAGEMENT

NGUYEN HONG HAI

JUNE 2020

NGUYEN HONG HAI

MARCH 2020

i

ACKNOWLEDGEMENT

The author wishes to convey the gratitude to the following persons who

wholeheartedly devoted and helped make this piece of work a reality:

To Assciate Prof. Nguyen Thi Gam and Dr. Rene Vencer for their advices,

guidance, supervision, suggestions and precious time in enthusiastically reading and

checking the manuscript, providing the author useful materials;

To the leadership of International Cooperation Center for Training and Study

Abroad and their staff for their enthusiasm to support executive for the participants

completed the study program;

To Thai Nguyen University of Economics and Business Administration and

Central Philippine University for the help that I receive to finish my dissertation;

To my family and friends for their love and support in one way or another, and

to all who have contributed to make this study a success.

NGUYEN HONG HAI

ii

LỜI CẢM ƠN

Tác giả muốn bày tỏ lời cảm ơn chân thành tới những người đã toàn tâm toàn ý

giúp đỡ tác giả hoàn thành công trình này

Xin được cảm ơn PGS TS Nguyễn Thị Gấm và TS Rene Vencer về các hướng

dẫn, hỗ trợ, gợi ý cũng như nhiệt trình trong đọc bản thảo và hỗ trợ tài liệu cho tác giả;

Xin được cảm ơn lãnh đạo và nhân viên Trung tâm Hợp tác quốc tế về Đào tạo

và Du học đã nhiệt tình giúp đỡ tác giả trong việc hoàn thành chương trinh đào tạo;

Xin được cảm ơn Trường ĐH Kinh tế và Quản trị Kinh doanh và Đại học

Central Philipine tron việc hỗ trợ tác giá hoàn thành Luận án này;

Xin được gửi lời cảm ơn chân thành đến gia đình và bạn bè đã giúp đỡ, hỗ trợ

và động viện tác giả để tác giả có thẻ vượt qua khó khan mà hoàn thành luận án này.

NGUYỄN HỒNG HẢI

iii

DECLARATION

I certify that this is my own research. The data stated in the thesis is true, all

citations are indicated origin. The research results of the dissertation were published in

the scientific journal not identical with any other works.

The author of the thesis

NGUYEN HONG HAI

iv

LỜI CẢM ĐOAN

Tôi cam kết đây là nghiên cứu của riêng tôi. Các dữ liệu nêu trong luận án là

trung thực, tất cả các trích dẫn được chỉ định nguồn gốc. Các kết quả nghiên cứu của

luận án đã được công bố trên tạp chí khoa học không giống với bất kỳ công trình

nào khác.

Tác giả luận án

NGUYỄN HỒNG HẢI

v

TABLE OF CONTENTS

ACKNOWLEDGEMENT .............................................................................................i

LỜI CẢM ƠN ................................................................................................................ii

DECLARATION ......................................................................................................... iii

LỜI CẢM ĐOAN .........................................................................................................iv

TABLE OF CONTENTS..............................................................................................v

LIST OF TABLES..................................................................................................... viii

LIST OF FIGURES.......................................................................................................x

CHAPTER I. THE PROBLEM AND ITS SETTING................................................1

1.1. Background and Rationale of the Study ..............................................................1

1.2. Objectives.............................................................................................................3

1.3. Hypotheses...........................................................................................................4

1.4. Theoretical Framework ........................................................................................5

1.4.1. Stakeholder Theory .................................................................................................6

1.4.2. Process Theories......................................................................................................7

1.4.3. Expectancy Theory..................................................................................................8

1.4.4. Equity Theory..........................................................................................................9

1.5. Conceptual Framework ......................................................................................11

1.6. The Operational Definitions...............................................................................14

1.6.1. Corporate Social Responsibility............................................................................14

1.6.2. Employee Commitment ........................................................................................16

1.6.3. Organizational Performance .................................................................................18

1.7. Significance of the Study ...................................................................................19

1.8. Scope and Delimitation......................................................................................19

1.9. Organization of the Dissertation ........................................................................20

vi

CHAPTER II. LITERATURE REVIEW .................................................................21

2.1. Related Literature Review..................................................................................21

2.1.1. Corporate Social Responsibility............................................................................21

2.1.2. Employee Commitment ........................................................................................28

2.1.3. Organizational Performance .................................................................................35

2.1.4. Corporate Social Responsibility and Employee Commitment .............................40

2.1.5. Corporate Social Responsibility, Employee Commitment and Organizational

Performance..............................................................................................................................45

2.2. Empirical related studies....................................................................................50

2.2.1. Identification of Gaps in Current Literature..........................................................58

2.2.2. Summary of the chapter ........................................................................................59

CHAPTER III. METHODOLOGY...........................................................................60

3.1. Research Design.................................................................................................60

3.2. Population, Sample Size and Sampling Technique ...........................................62

3.3. Research Instruments.........................................................................................63

3.4. Data Gathering Procedures ................................................................................65

3.5. Data Processing and Data Analysis ...................................................................67

3.5.1. Descriptive Statistics.............................................................................................67

3.5.2. Purification Process...............................................................................................67

3.5.3. Testing the Hypothesizes ......................................................................................72

3.6. Results of Scale Purification ..............................................................................72

3.6.1. The Scale Purification for Corporate Social Responsibility .................................73

3.6.2. The Scale Purification for Employee’s Commitment ...........................................76

3.6.3. The Scale Purification for Employee’s Perception about Organizational

Performance..............................................................................................................................79

3.6.4. Scale Purification after Exploratory Factor Analysis............................................80

vii

CHAPTER IV. DATA PRESENTATION, ANALYSIS AND

INTERPRETATION...................................................................................................81

4.1. Measurement Model...........................................................................................81

4.1.1. CFA for Corporate Social Responsibility to Society Scale ..................................81

4.1.2. CFA for Corporate Social Responsibility to Environment ...................................82

4.1.3. CFA for Employee’s Affective Commitment.......................................................83

4.1.4. CFA for Employee’s Affective Commitment.......................................................85

4.1.5. CFA for Employee’s Normative Commitment.....................................................86

4.1.6. CFA for Organizational Performance ...................................................................88

4.2. Convergent and Discriminant Validity of Scale ................................................90

4.3. Hypothesis Testing.............................................................................................92

CHAPTER V.SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ....97

5.1. Summary ............................................................................................................97

5.2. Findings..............................................................................................................98

5.3. Conclusion........................................................................................................100

5.4. Recommendation..............................................................................................102

5.4.1. Completing the system of regulatory documents, guiding the implementation of

CSR.........................................................................................................................................102

5.4.2. Enhance the application of standards related to CSR .........................................103

5.4.3. Training, raising awareness and ability of employees on CSR at banks ............103

5.4.4. Establishment of funds for CSR programs..........................................................104

5.5. Limitations of the study and scope for future research....................................104

REFERENCES ..........................................................................................................105

APPENDIX 1..............................................................................................................109

viii

LIST OF TABLES

Table 1.1. The Scale for Measure Social Responsibility for Society............................15

Table 1.2. The Scale for Measure Social Responsibility for Environment...................15

Table 1.3. The Scale for Measure Affective Commitment ...........................................16

Table 1.4. The Scale for Measure Continuance Commitment ......................................17

Table 1.5. The Scale for Measure Affective Commitment ...........................................17

Table 1.6. The Scale for Organizational Performance ..................................................18

Table 3.1. Number of Respondents for each Bank Branch ...........................................66

Table 3.2. Exploratory Factor Analysis of SRS for Society Scale................................74

Table 3.3. Item-Total Statistics of SRS for Society ......................................................74

Table 3.4. Exploratory Factor Analysis of Social Responsibility for Environment Scale75

Table 3.5. Item-Total Statistics for Social Responsibility for Environment Scale .......75

Table 3.6. Exploratory Factor Analysis of Affective Commitment Scale ....................76

Table 3.7. Item-Total Statistics for Affective Commitment Scale................................77

Table 3.8. Exploratory Factor Analysis of Continuance Commitment Scale ...............77

Table 3.9. Item-Total Statistics Continuance Commitment Scale ................................78

Table 3.10. Exploratory Factor Analysis of Normative Commitment Scale ................78

Table 3.11. Item-Total Statistics Normative Commitment Scale .................................79

Table 3.12. Exploratory Factor Analysis of Organizational Performance Scale ..........79

Table 3.13. Item-Total Statistics Organizational Performance Scale ...........................80

Table 3.14. Number of Item after Exploratory Factor Analysis ...................................80

Table 4.1. Confirmatory Factor Analysis Results for Social Responsibility for Society

Scale...............................................................................................................................82

Table 4.2. Confirmatory Factor Analysis Results for Social Responsibility for Society

Scale...............................................................................................................................83

ix

Table 4.3. Confirmatory Factor Analysis Results for EAC Scale.................................84

Table 4.4. Confirmatory Factor Analysis Results for ECC Scale .................................86

Table 4.5. Confirmatory Factor Analysis Results for ENC Scale.................................87

Table 4.6. Confirmatory Factor Analysis Results for OP Scale....................................88

Table 4.7. Final Measurement Model Results...............................................................90

Table 4.8. Construct Correlation Matrix .......................................................................92

Table 4.9. Summary of Hypothesis-Testing Results.....................................................95

x

LIST OF FIGURES

Figure 1.1. Overview of the Integrative Model of CSR influence on Employees and

Organizational Performance............................................................................................6

Figure 1.2. Conceptual Framework ...............................................................................12

Figure 1.3. Research Model...........................................................................................13

Figure 3.1. Research Procedures...................................................................................62

Figure 4.1. The Results of Structural Equations Modeling...........................................93

1

CHAPTER I.

THE PROBLEM AND ITS SETTING

1.1. Background and Rationale of the Study

The economy of the province is largely dictated by its capital city, Thai

Nguyen, which is the fastest growing city of North Vietnam. The city is the gateway

to northwest Vietnam. The city is also the center of heavy industries of northern

Vietnam and one of top provinces of Viet Nam which has high level of service

development. The Thai Nguyen banking sector compromises 19 banks that currently

operate in different markets. This study is restricted to these retail banking

institutions.

One of factors that affect service quality is employee commitment. When

employees with high commitment with company, they will provide better services to

customers. Most of banking institutions in Thai Nguyen province do not realize this

relationship.

Social responsibility (SR) directed towards employees can be perceived

positively by both prospective employees and a wider audience, including actual

employees. Indeed, Riordan, Gatewood & Bill (1997) used external corporate image

as a proxy for social performance, and found that employee‘s perceptions of

corporate image can positively influence job satisfaction, and negatively influence

turnover and turnover intentions. Recently, researchers have investigating how social

responsibility may influence incumbent employees (Brammer et al, 2007). It is

clearly that social responsibility influence employee commitment and then employee

commitment affects organizational performance. Furthermore, Viljo Lindsten (2018)