CSR pyramid as applied to Mauritian companies

This chapter presents the results and discussions of data collected from survey. The responses from the different sections of the questionnaire will be analysed and discussed to find out the CSR pyramid as applied to Mauritian companies.

Responses of the questionnaire

Figure 4.1: Response Rate of the Questionnaire per sector

The pie chart above depicts the response rate of questionnaire. Out of 80 companies surveyed, only 44 responses were obtained which represents 55% response rate. The 55 % rate consists of 18% from Industry, 18% from Commerce, 2% from Bank, 16% from Leisure/Hotels, 5% from Sugar, 7% from Investment, 9% from Insurance, 2% from Transport and 23 % from other Sectors (Refer to Appendix 4). Others include construction companies, import & export companies, automobile companies and leasing companies.

Company Basic information

Section A of the questionnaire consists of numerous questions. In this section, respondents were asked some general information in order to have an overview of the company’s profile and information about CSR commitment such as the number of years the firm has been involved in CSR activities, whether the firm has a specific department where CSR is controlled or implemented and whether the firm currently has any CSR project commitment.

Department involve in CSR activities

An analysis of information collected in section A clearly shows that the leading firms in Mauritius do have a specific department where CSR projects are being controlled and implemented. This can clearly be seen in figure 4.2.

Figure 4.2: Firms having a specific CSR department

The figure 4.2 above indicates that 65.9% of the population surveyed, do own a CSR department where CSR projects are managed while 34.1 % do not have such division. This is a positive signal as it shows that these firms are carrying CSR activities in a formal way which further implies that these firms already have an established structure to select and prioritise funding request.

Moreover, it was observed that bank, hotels and the sugar are leading sectors for having an established CSR department (Refer to Appendix 4). The results obtained is consistent with the finding of Ragodoo (2009) who found that these three sectors are the top leading sectors, which are taking their environmental and social responsibilities seriously through the establishment of CSR projects.

Out of those 34.1 % firms which do not have a CSR department, it was found that CSR is being controlled and implemented the HR department, Accounting department, Marketing department, Communication department and the Finance department.

It is worth noted that though these firms do not have a specific CSR department, they are contributing to CSR activities by following the July 2009 government regulation requesting all profit – making firms to devote 2% of their share profits for CSR activities. Thus, it is a good indication that firms in Mauritius are complying with the new law imposed to them.

Numbers of years firms are involved in CSR activities

Firms were further surveyed on their engagement in CSR activities in order to access the numbers of years they are involved on these activities. Figure 4.3 provides a clear picture on the numbers of years these firms are engaged in CSR activities.

Figure 4.3: No. of years firms are involved in CSR activities

Analysis shows that CSR is not a new concept in Mauritius. Most firms are found to be engaged in CSR activities for more than 2 years (63.9%) as shown in figure 4.3. The above findings, therefore, are in line with the views of Deloite (2008) who found that a large majority of Mauritian firms (56 %) are engaged in CSR activities for more 2 years in the year 2008. Infact, 39 % these firms had started CSR activities since their start -up.

Thus, it can be deduced that firms were well aware of the term CSR before being imposed by the government.

Current CSR projects commitment

Respondents were also questioned on their current CSR projects commitment. It is to be noted that 59.1 % of respondents are currently involved in CSR projects. This is shown in table 4.1 below.

Table 4.1: CSR projects commitment

Some of the CSR projects currently being undertaken by Mauritian firms are as follows:

Job creation in ICT sector

“Engagement citoyen”

Positive Approach to total Health (PATH)

Planters Reform Association: Aid Jaago

BAI health programme

Trust fund for excellence in sports

ECO TV

Mauritian wild life

Craft Incubator

Set up of a handicapped training institutions so that handicapped people can be employed by companies in Mauritian

Sponsorship of charitable institutions

Sponsoring Valles-De- Prete people

Mauritius Mutual Aid Association scholarship Award Corporate Social responsibility

Promoting education and development

Sponsoring for cultural show

These firms include the Air Mauritius Ltd, Rogers and company Ltd,Omnicane, Innodis Ltd, Ciel Group and many other firms.

CSR definition as per the respondent

For this question, a three – point likert scale was used. The definition sets for this question is based on Carroll definition of CSR. The mean calculated for this question is shown in the table below.

Table 4.2: Definition of CSR – Mean value

From the responses obtained, it is interesting to note that all statement were ranked very high, whereby “CSR is about to obey the law, be ethical and strive to make profits” ranked the highest (mean of 2.55).

The identified trend resembles that of Friedman (1962). The latter argued that businesses have only one social responsibility, it is the ability “to use its resources and engage in activities designed to increase its profit so long as it stays within the rule of the game, which is to stay engages in open and free competition without deception or fraud.” This shows that Mauritian firms want to flourish by doing business only.

It is further noted that “CSR is the economic, legal, ethical and discretionary expectations that society has of organisations at a given point in time (Carroll 1979)”, got the second highest best definition. As per the Guidelines on Corporate Social Responsibility, CSR activities need to be conducted in areas such as Health, Education & training, Leisure and sports. Thus, firms find the definition of Carroll best fitted to define CSR in Mauritius when considering the statement proposed by the MEF on Guidelines on Corporate Social Responsibility.

This is inline with Crane and Matten (2004) finding who mentioned that four-part model of Carroll has numerously been used by top management and journals. The different layers in the pyramid help managers see the different types of obligations that society expects of corporations. Thus, the same is applying to Mauritian firms.

Evidence has shown that defining CSR as “CSR is about to obey the law and be ethical”, totally reflect that of Visser (2006). According to author, CSR is more about economic and philanthropic expectation in developing companies. Legal and Ethical are given least consideration. Hence, Mauritius being a developing countries, share the same view with Visser (2006). Firms believe that abiding with law and to be ethical, do not imply of being socially responsible.

To summarise the above, it can be said that beside profit motives and working for the interest of shareholders, firms do show concerned on the social aspect when doing business. Also, some firms consider themselves to be socially responsible to comply with the country’s laws and regulations and be ethical in their practice.

Companies’ Motivations for CSR

As seen in early chapters, many researches were done across the world to find out the main factors which motivates firms to adapt CSR activities.

To study the motivational factors of CSR in Mauritian firms, a five – point likert scale questions was set in the questionnaire. However, only the maximum frequencies of responses were interpreted since it was found that interpreting all the frequencies in the table were leading to confusions. A detailed table is shown in the Appendix 4.

As shown in figure 4.4 below, majority of the respondents agree / strongly agree that they are being engaged in CSR activities mainly to enhance their general well – being of the community and to enhance employee commitment community. However, 15 were indecisive (34.1%) on the statement that they are engaged in CSR to improve the relations with suppliers and institution. Moreover, it was found that 20 respondents (45.5%) strongly opposed on the fact that they are engaging in CSR activities just because of the government – based on the new law introduced.

This trend reflects the arguments of the Swanson (1995) who identified 3 types of view for corporations to be engaged in CSR activities. It was found that the analysis comforts the negative duty approach and positive view of Swanson (1995). The conclusion further reflects the legitimacy theory argument in the sense that corporation is acting in the interest of the society instead of their stakeholders only.

Figure 4.4: Motivations factors for CSR – Frequency

Different approaches in CSR practice

One among the main objectives of this study was to find out the different approaches used by firms in their practice of CSR. Thus for this purpose, the respondents were asked to choose the different approaches their firm has chosen in their practice of CSR and why they opted to do so. They had the possibility to choose more than one of the option given to them.

There are 3 options sets by the government in which these firms can contribute toward CSR activities. Thus, this study demonstrates the different approaches these firms have chosen. This is diagrammatically shown in the figure 4.5 below.

Figure 4.5: Approaches in CSR practice

Based on the survey carried out, it has been observed that 65.9 % (29 out of 44) of the respondents are carrying out their own approve programme run by the company itself. 47.7% of the population chose to finance an approve NGOs while 22.7% conduct CSR through an approve programme under the NEF. This shows that there exist a partnership between NGOs and Mauritian companies while for the approved programme under the NEF, can still be enhanced through further development.

Moreover, when Respondents were asked why they opted for these proposed approaches it was found that most of the firms have common objectives. Some of the common reasons brought forwards are:

Approve programme run by the company itself

To create public awareness of their well being of the community

To build up good relationship with stakeholders

To enhance the company’s reputation

Approved programme under the NEF

So as to focus on core activities of the company itself

Cost effective as less resources will be engaged in managing funds to CSR activities

Inline with the needs of the company such as providing training and jobs

Finance an approve NGOs

More cost effective

Help then to identify and communicate with people who are most in need and render financial assistance to their needs

Furthermore, a cross tabulation between sectors and approaches in CSR practice was generated (Refer to Appendix 4). The result obtained show that each and every firm does adopt at least one of the option proposed by the government.

It is worth noted that 100% of Bank and Sugar sectors opted for more than one approaches toward the contribution of CSR funds.

It was also observed that 71.4% (5 out of 7) of the hotels/Leisure sector carry out their own approve programme run by the company itself, 14.3 % (1 out of 7) opt to conduct CSR through an approve programme under the NEF while 42.9 choose to finance an approve NGO. These sectors were interpreted since according to Ragodoo (2009), the Bank, the Sugar and Hotel sectors are the main sectors to have a well developed structure on CSR activities.

Furthermore, it was found that most companies which do not have a CSR department tend to provide only for donations and charity purposes without performing CSR in depth that could have help them to gain a competitive edge.

Financial CSR commitments

CSR became an issue of interest in May 2009 when it was declared mandatory by the government in Mauritius. For the purpose of knowing how much funds companies were contributing for CSR activities before the new legislation, respondents were asked to indicate their financial commitment to CSR activities at the time when CSR was voluntary.

A cross tabulation between sectors and financial CSR commitment was generated, (Table 4.3).

4.3: Cross tabulation between sectors and financial CSR commitment

With regard to funds committed to CSR, the investment, Transport, Sugar, Bank, Commerce, Insurance and others sectors were found to be the least one in the contribution of CSR funds. The test revealed that 100%, 75%, 60% and 50% of firms within these sectors were contributing less than 1% and 1% for CSR activities. Hence, these firms are now obliged to contribute much more (2%) on CSR than they used to contribute before

Furthermore, it has been observed that the hotels industry was the top one to contribute 2% or more than 2% of their share profits to CSR activities. This result supports the view point of Ragodoo (2009) who stated that the hotels industry was the top of the list in terms of percent of profits committed to CSR. This was so because as per author, the hotel. The Banking and Sugar sectors give lots of consideration in the establishment of systematic procedures when it comes to select funding request in the society.

Thus, it can therefore be concluded that even if CSR was not mandatory before May 2009, the hotels sector were taking their role seriously, as far as CSR contribution was concerned. By so doing, they were building a better Mauritian society where in return they enhanced their general well-being of the community.

Mauritius’s CSR Pyramid

Another objective was to determine which areas are given most priority by corporation in the allocation of funds for CSR. Hence, for the purpose of this finding, a number of factors were considered which bring towards the contribution of CSR in Mauritius.

Priority consideration in the allocation of CSR funds

Earlier chapters identified four CSR components which together build up the total social responsibilities. These are namely the economic responsibilities, legal responsibilities, ethical responsibilities and philanthropic responsibilities.

Carroll (1991) depicts these four components in the form of a pyramid where later Visser (2006) revised this pyramid in the context of developing countries. The table 4.4 below shows the ranking of these four components by the two authors prior to what they considered as most important.

Table 4.4: CSR as applied by Carroll (1991) and Visser (2006)

Thus, in order to find out how the pyramid is applied to Mauritian firms, Respondents were asked to rank the four components, their company gives most priority in the allocation of fund to CSR activities. Mean values were used to rank the four components (Refer to Appendix 4).

Table 4.5: CSR as applied to Mauritian firms

From data gathered, it has been observed that in Mauritius, Philanthropic responsibilities is given the first most priority, the second most priority is given to Ethical responsibilities, then comes the Economic responsibilities and last the legal responsibilities.

The identified trend differ that of Carroll (1991) and Visser (2006). As highlighted in the literature review, Carroll pyramid was based mainly on American context which is applied to developed countries. Thus, it was obvious that the order of ranking in Mauritius would not resemble that’s of Carroll since Mauritius is a developing country.

However, it was expected that the result obtained, should have been consistent to that of Visser (2006). The latter concluded that for developing countries, the order in which funds are allocated for CSR activities, are not the same as demonstrated by Carroll. The economic layer being the base of the pyramid is given first priority in developing countries, followed by the philanthropic, then the legal and lastly the ethical. However, the result obtained show that even if Mauritius is among the developing country, the order differ that of Visser (2006).

Mauritian firms give philanthropic responsibility the most priority so as to enhance their general well – being of the community and to enhance their company’s reputation as seen it section 4.4 of the Analysis. Also, as per the Guidelines on Corporate Social Responsibility specified by the MEF, firms are expected to conduct CSR in areas such as Socio economic development (including gender and human rights), Health, Education and training, Leisure and sports, Environment and Catastrophic interventions & support. As such these areas form parts of philanthropic activities. Thus, it is given the highest important.

It is interesting to note that part of the finding resemble that of Visser (2007). He pointed out that “in developing countries CSR is most commonly associated with philanthropy or charity, i.e. through corporate social investment in education, health, sports development, the environment, and other community services.”

Ethical organisations demonstrate real concern to the society and respect for employees. Hence, it is given the second most priority as companies in Mauritius do adopt code of conduct.

According to Visser (2006) and Carroll (1991), economic responsibilities are given the highest priority. However, in Mauritius, it was observed that the economic responsibility is found at the third position. This is so because as per the new law imposed by the government, all firms making a profit should contribute 2 % of their profit towards CSR activities. Thus, firms consider them to be socially responsible to engage in philanthropic activities rather than that of economic.

As far as legal responsibilities are concerned, firms are bound by the Companies law and the Mauritian legislation thus it is obvious that they should comply with the law in order to be socially responsible. Then, it is given least priority.

Moreover, Respondents were asked their opinion on the four components which they think should have been ranked first, second, third and last in the allocation of CSR funds. Mean values were used to rank the four components (Refer to Appendix 4). The result is shown in table 4.5 above.

Table 4.6: Order of preference as per Respondent

From table 4.6, it is clearly shows that Respondents give philanthropic their main priority. This result reflects that of Mauritian firms which also consider philanthropic activities as their first priority when allocating funds to CSR activities. This is so, because as specified by the MEF in the Guidelines on Corporate Social Responsibility, CSR activities need to be conducted in the areas like the Environment, education, Sports, Health/ disable, poverty, Employees’ and the local community.

Thus, both Mauritian firms and the Respondents find it necessary to give philanthropic responsibilities the utmost importance. It is interesting to note that what firms are contributing towards CSR activities, are in line with what the society are expecting from them.

Furthermore, Economic stands for the second most important while the legal is found to be the third most important and the least priority is given to ethical responsibilities. Each component will be further discussed in more details in the coming sub – section. Thus, to conclude, it can be said that the order of preference when allocating CSR funds by Respondents differ from that ranking as applied by Mauritian firms.

Against, it is found that result obtained is inconsistent of that Carroll (1991). However, it was fouond that the order of preference is more or less the same like that Visser of (2006, 2007), when allocating funds to CSR activities.

Economic Responsibilities

There are numerous activities carried out by a firm which classified it to be economically responsible. According to Carroll (1991), the first responsibility of any firm is the economic responsibilities. To be able to find out if Mauritian firms are engaged in economic activities, the respondents were asked to choose among the different statements given to them. For this question, respondents were given the possibility to choose more than one option.

Figure 4.6: Economic responsibilities – Frequency

From the above chart, evidence has shown that most of the companies invest in human capital. Companies prefer to invest in their employees in order for these employees to produce economic value while performing their job. By so doing, firms can maximize their profits. Thus, this result is consistent with Friedman’s (1962) work. The latter argued that corporations should engage in activities designed to increase the firm’s profits. Thus, the author asserts that the business of business is only to do business.

The survey further showed that to some extent, companies are involved in the jobs creation activities, only to create public awareness to their brand. These firms include the Air Mauritius Ltd, Compagnie Mauricienne de Textile ltee, AML, Appavoo Group and Sonia Wear ltd.

According to Carroll (1979), a firm is considered as an economic unit when it is engaged in producing goods and services that society desires and to sell them at a profit. As, seen in earlier chapter, Visser (2007 cited Nelson, 2003) identified 8 economic multipliers that firms can do in order to be an economic unit. These are namely the to generate investment and income, produce safe products and services, create jobs, invest in human capital, establish local business linkages, spread international business standards, support technology transfer and build physical and institutional infrastructure.

Based on the column chart showed in figure 4.6, it was found that leading firms in Mauritius are engaged on at least one of the economic multipliers, mentioned by Visser (2007) in his paper, which make them to be socially responsible.

Legal Responsibilities

Society expects and requires organization to obey the law. Thus, in order to be a socially responsible company, business entities are required to comply with laws and regulations, formulated by governments. For this part, Respondents were asked to indicate the different legal law which they abide for.

The below chart summarises the different approaches towards legal responsibilities. Companies follow this type of responsibility in order to be socially responsible. Almost all statements are found to be in the same range, whereby compliance with environmental specifications the highest, (Refer to Appendix 4).

Figure 4.7: Legal responsibilities -Frequency

This clearly indicates that firms consider them to be socially responsible to comply with Mauritian legislation.

Ethical Responsibilities

Organization is expected to be ethical. Ethical responsibilities is about being moral, doing what is right and avoid harm. For the purpose of accessing if firms do adopt any code of conduct, Respondents were provided with a series of such code which they probably abide by.

From table 4.8 below, 32 out of 44 respondents are found to adopt codes of ethics while 28 out 44 have a policy to ensure honesty and quality in all its contacts. Overall, it can be seen that out of 44 companies surveyed, each and every company do adopt at least one code of conduct.

Table 4.8: Ethical responsibilities

The obtained results, thus reflects those of Carroll (1991). The author suggest that ethical duties of organizations are to “embody those standards, norms, or expectations that reflect a concern for what consumers, employees, shareholders, and the community regard as fair, just, or in keeping with the respect or protection of stakeholders’ moral right. Adoption of a company Code of conduct helps to show management’s commitment to CSR and it gives a direction to stakeholders thus promoting ethical behavior. Hence, Mauritian firms are ethical when doing business.

Philanthropic Responsibilities

As highlighted in chapter 2, organizations are expected to be a good corporate citizen to fulfill the philanthropic responsibilities. Thus, firms in Mauritius choose among the different areas of intervention proposed by the government, to fulfill their philanthropic duties. These are namely: The environment, Education, Employee welfare, Local community, Heath & disable and Poverty alleviation.

For analyzing which of the different approaches firms contribute the most, Respondents were asked to choose among the different option provided to them.

Figure 4.8: CSR activities proposed by government

The above illustration figure 4.8 shows the choices of Mauritian companies when contributing towards CSR activities. Caring towards Employee Welfare is seen to be key – priority by business entity with a mean of 1.57. Also, a lot of consideration is given to local community projects as shown in figure 4.6. This is legitimate, given that these firms maintain a strong relation with people around them. Education stands in the third position with a mean of 1.53 while helping in the promotion of health care stand in the forth position.

Thus, this result is not totally consistent with the Ragodoo’s (2009) work. The latter studied CSR of the top 100 companies and 19 locally incorporated banks in Mauritius. He found that Environment, Education and Health are the top three main priorities given by Mauritian firms, when allocating funds to CSR activities. He also found that Poverty alleviation and Employee Welfare are given the least important when contributing to CSR activities while based on the findings, it is shown that the trend has now changed.

The top three priorities are the Employee Welfare, Local community and Education while poverty alleviation is ranked the lowest on the CSR agenda of Mauritian business organisations. This is so, because firms prefer to act in the interest of their employees and the local community so as to motivate their employees to work in the best interest of the company and as well as to enhance their general well being in the community.

Figure 4.9: Employee Welfare

Nowadays, employees are given most important thus showing that there is evidence of good management practices towards employees. Figure 4.9 shows the different approaches by firms towards Employee Welfare. It is found (32 out of 44) organisations offer training facilities to their staffs. (31 out 44) firms provide health and occupational safety while 23 out of 44 companies provide measure to enhance employee satisfaction and motivation.

But as far as poverty alleviation is concerned, the result reflects that of Ragodoo (2009).

Table 4.9: Sectors * poverty Alleviation

From the above table, it can see that the commerce, the sugar, the Banks, the transport and the leisure sectors is more active in the fighting against poverty. According to Ragodoo (2009), there is direct involvement in the fight against absolute poverty by Hotel sector (19 %), the sugar sector (17%) and the Bank sector (13 %). Again this result is the same as that of Ragodoo’s surveyed.

The 5 most cited responsibilities which form part of CSR activities in Mauritius are namely (Refer to Appendix 4):

Invest in human capital

Jobs creation

Policy to ensure honesty and quality in all its contracts

Adopt codes of ethic

Prohibit smoking at workplace

Benefits Derived from CSR project

There are many benefits derived from CSR projects selected. Thus, to have an insight of the likely benefits companies are gaining from CSR projects selected, Respondents were asked to choose among the different options provided to them.

Figure 4.9: Benefits derived from CSR projects

The table above shows that 77.3% (34 out of 44) of the population surveyed are benefiting from good relations with the government and the communities. While, 61.4% of the respondents are enhancing their brand value and gaining good reputation through the CSR projects selected. Also, it is found that 56.8 % (25 out of 44) of the Respondents are enhancing good corporate governance. Finally, 50% of the population surveyed shows that CSR contributes towards long-tern sustainability for both the firm and society.

It can be said that factors like reduced operating costs, better risk and crisis management and increased productivity are not very likely benefits by firms. Hence, management teams should rather focus towards CSR projects which encourage its employee to increase productivity. It is to be noted that the motivational factor in section 4.4, contributes towards benefits of the CSR projects which are being selected.

Profitability of firm without CSR commitment

Respondents were further asked about the effect on profitability of their firm without CSR commitment. To identify the overall trend and show the perception of the Respondents, a cross tabulation was generated between position and effect on profitability without CSR commitment

Table 4.10: Current position * Effect on profitability without CSR commitment

It is worth knowing that 27.3 % of accountants showed ‘Neutral Response’ to this survey. They believed that CSR do not have any effect on the turnover. Evidence from table 4.10 further demonstrates that out of 13 CSR officers surveyed, 6 showed ‘Neutral Response’, 3 are showed that profits would have increased while 4 believed that profits would have decrease and other. Thus, according to the obtained results it can be concluded CSR is neither a gain nor a loss for business entities.

Many important findings were identified with completion of this chapter. This has therefore helped in providing answers to the research questions mentioned in Chapter 1. Consequently, this result will also be used to provide useful recommendations in the next chapter.