international journal of management research and review

IJMRR/ April 2013/ Volume 3/Issue 4/Article No-6/2733-2739

ISSN: 2249-7196

INTERNATIONAL JOURNAL OF MANAGEMENT RESEARCH AND REVIEW TRUST BUSINESS SOCIAL RESPONSIBILITY (BSR) ON ORGANIZATIONAL PERFORMANCES IN NIGERIAN SMALL SCALE INDUSTRY: A PILOT TEST Abdullahi Hassan Gorondutse*1, Haim Hilman2 1

PhD Candidate, School of Business Management, College of Business, Universiti Utara Malaysia. 2

Universiti of Utara Malaysia.

ABSTRACT This paper examines a small amount of sample data on the Trust of business social responsibility on organizational performances in Nigeria small scale industry. Therefore, instruments such as content and face validity, reliability and the data normality were also examined base on the on revised version by expert which comprises some Academicians and Practitioners, a few data were analysed using the statistical software SPSS version 18. The outcome reveals that the instruments are reliable and the data for pilot study show evidence of reasonable regularity. Keywords: Trust of Business Social Responsibility (BSR), Organizational Performances, Pilot test, Nigeria. 1. INTRODUCTION Business social responsibility is of growing apprehension and holds strategic implications to business across the globe (Ahmad & Ramayah, 2012; Hsu, 2012), large business provide significantly in BSR actions (Luo & Bhattacharya, 2006). There has been considerable increase in scrutiny on business ethics and social responsibility and this has engrossed a great deal of argument pertaining popularity of such actions particularly in small and medium enterprises (Ahmad & Ramayah, 2012; Gorondutse & Hilman, 2013). Effective use of BSR by the managers can distinguish a business from its rivals and gain competitive benefits (Porter & Kramer, 2006; Hsu, 2012). However, previous research done on the current issues on ethics and social responsibility in the business-related setting has so far concentrated on large firms, especially in the context of emerging nations particularly Nigeria. Reasonably, little is known about SMEs owner/managers mind-set regarding ethics and social responsibility, mainly concerning how they trust the vital of business ethics and social responsibility as part and parcel of managers decision, therefore, this information is very important in view of the fact that usually smaller firms need to acknowledged the significant of being ethical and social responsibility and apply them in practices (Ahmad & Ramayah, 2012; Gorondutse & Hilman, 2013). Furthermore, creation of trust among stakeholders is one of the most immediate consequences of a business performance (Hilman & Gorondutse, 2013); trust is a vital asset in every business and non- business relationships. Moreover, the high level notion of the *Corresponding Author

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variable is valuable in interpreting many kinds of associations that are studies from diverse perspectives (Dass & Teng, 1998; Hilman & Gorondutse, 2013). Similarly, trust is crucial for understanding business links when a person who trusts is in a high risk rank. The main issue around the world is that whether the smaller firms dedicate resources and hard work to try and improve the community and the globe around them will experience in terms of performance, for example there are diverse discussion of philanthropic and profitability faced by mostly smaller firms (Prathaban & Rahim, 2005). Consequently, in ability to make consensus among the previous research indicate the need to additionally examines why business ethical and social responsibility practices in smaller firms, in addition, while there is an increasing awareness about social responsibility in developing nation, a lot of the previous research has been in USA and western Europe even if any in developing nation they are mainly concentrated on larger firms and multinational companies. Therefore, base on the above information the paper intend to do a pilot test in the context of small scale industry in Kano North- West Nigeria. Hence, Trust of BSR serve as independent variable while firm performances as dependent variable. Pilot test indicate little preparation, in which a small sample is take prior to the complete scale study. Thus, this paper carry out a pilot test in order to accomplished some objectives; to test the validity and reliability of the study instrument and to get nearer into the valid situation of the main study (Gay, Mills & Airasian, 2006). Validity of the instrument is the degree to which an instrument is measuring what it is suppose to measure, while reliability signify the level to which an instrument is error free and regular and stable across time and also across the various items on the scale (Sekaran & Bougie, 2010). This paper will be organized as follows, next a discussion on the methodology, then results of validity and reliability test, and lastly conclusion is provided. 2. METHODS Giving the idea that this study is a pilot test of ongoing research small samples of small scale industry was selected base on the simple random sample. This is in line with the recommendation by Malhotra (2008) that the sample size for pre-test is frequently few, starting from 15-30 respondents but it be increased substantially if the test involves several stages. Thus, a total of 50 copies of questionnaires were independently circulated and 42 were completed and returned out of which 8 were not properly concluded and thus, not considered for analysis. However, Sekaran and Bougie (2010) clearly specified that the most usual test of inter-item uniformity reliability is Cronbach’s alpha coefficient. Thus, Cronbach alpha test is affianced in this paper to establish internal uniformity of the tool. The data was analysed using SPSS version 18 for windows. Before the delivery of the questionnaires, the draft was firstly submitted to experts who includes Academician and Practitioners’ and also to the distinctive respondent for glance and content validity. The entire procedure was finished between the periods of four weeks in the months Feb. 2013/March 2013. 2.1 Instrumentation and Measurement of Variables The study employed a well organized questionnaire comprising of closed ended multiple choice-questions were used for the study. Known that mostly of the items in the questionnaire

Copyright © 2012 Published by IJMRR. All rights reserved

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are overwhelmed in measuring the respondents’ perceptions. Thus, Likert-type scale is considered as the most appropriate and reliable (Alreck & Settle, 1995; Miller, 1991). The mostly rating scales for measuring the latent construct in social science research will be used in the study (Churchill & Peter, 1984). The study will organise all variables in the measuring instrument to use 7-point Likert type of scale, including the independent and the dependent variable. In addition, a 7-point Likert scale is said to offer specify comment and also not subjecting the respondents into any undue cognitive burden (Hair, Black, Babin, Anderson, Tathan, 2010; Cavana et al., 2001; Churchill & Peter 1984). Consequently, to attain a better best possible outcome in information giving out and scale reliability, 7-point Likert scales is said to be proficient (Churchill & Peter 1984). In addition, a 7- point scale appears to be most favourable, this is because a scale with more points enables the respondents to show their stand contentedly, similarly, adopting a scale with mid-point based on the comments by Krosnick and Fabrigar (1997), that forcing participants to act in a particular direction could outcome in an enhance of dimension error. Krosnick and Fabrigar (1997) also found that the effect of interviewer bias tends to decrease and data quality tends to increase when a midpoint is included in a scale. This will give the respondents independent of expressing their feeling. Consequently the variables enclosed in the study are: Trust of BSR and firm performances. All the variables are uni-dimensional Section 1: consists of a set of three questions that seek to measure the level of organization trust and keep promise towards the attainment of ethical issues. Section: contains seven items that are directed to measure the organizational performances as perceived by the respondents. Finally, section 3: Consists of questions about the demographic facts of the participants. Merely the considerable items that will be used in answering the research questions are included in the survey. Moreover, reactive questionnaire are not included in order to obtain high response rate (Gorondutse & Hilman, 2012; Sekaran & Bougie, 2010; ). 3. RESULTS OF VALIDITY AND RELIABILITY TESTS 3.1 Content and face validity: in order to make sure that the determine consists of a sufficient and representative position of items that spout a challenging idea, this includes a systematic evaluation of the scale’s ability to determine what is theoretical to measure. Thus, content validity entails requiring a few samples of characteristic respondents and/or team of specialist to make judgement on the appropriateness of the items chosen to determine a variable (Gorondutse & Hilman, 2012; Hair, Money, Samouel & Page, 2007; Hair et al., 2010; Sekaran and Bougie, 2010). Therefore, a sample of the instrument of this paper was circulated to specialist in order to get outcome regarding the suitability, competence, and adequacy of the things that are planned to determine the constructs under assessment. Equally, some Ph.D. scholars who are wellknown with the context of the study were also contacted to make sure the clearness of the instrument. A number of observations were re-worded/rephrase in order to determine the constructs properly and also to be clear to the possible respondents. This process of seeking for professional opinion was completed within three-week period. Following delightful into consideration of the observation by the specialist, then the researcher came up a better version of the instrument which was eventually administered for the pilot study.


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3.2 Reliability test: Besides of the content and face validity different kinds of reliability tests are frequently employed, therefore, the common method used by researchers is the internal consistency reliability test (Litwin, 1995). It is refer as the degree to which items “dangle jointly as a set” and are able of autonomously measuring the identical concept to the degree that the items are related with others. Therefore, according to Sekaran and Bougie (2010) state that the most accepted test of inter-item consistency reliability is Cronbach’s alpha coefficient. Therefore, Cronbach alpha test is employed in this study to determine internal consistency of the mechanism. After administration the data using SPSS version 18 for windows, the outcome shows that all the instrument have high reliability criterion ranging from 0.715 to 0.992. This is in line with the yardstick that an instrument with coefficient of 0.60 is considered to have an average reliability while the coefficient of 0.70 and more than reveals that the measurements has a high reliability standard (Hair, Black, Babin, Anderson, & Tatham, 2006, 2010; Nunally, 1978; Sekaran & Bougie, 2010) and is consistence with previous studies who use same measurement and reveals reliable and valid results (Ellen, Webb & Mohr, 2006; Hilman, 2009; Kaplan & Norton, 2000; Murphy, Trailer, & Hill, 1996; Osterhus, 1997; Stanaland, Lwin, & Murphy, 2011 & Tian, Wang, & Yang, 2011). Furthermore, Hair, Money, Samouel, and Page (2007) view that researcher usually regard that an alpha value of 0.70 as a slightest, nevertheless, lower coefficients may be adequate. Table1 indicates the grasp of the reliability outcomes. This may possibly perhaps be seen from the table that the result of pilot study shows that Cronbach’s alpha values for the variable under examination are all above 0.70. Accordingly, given the recognized benchmark of 0.70 all the contructs are reliable. Table 1: Summary of Reliability Study SPSS version 18 for windows Construct No of items Cronbach’s Alpha Trust of BSR 0.992 3 Organizational performances 0.715 7 Total 10 However, it is manifest from table 2 that the less than 5 years in existences of respondents are more than the rest years. This shows that most of the small scale industries are new similarly; with respect to location Kano has 85.7 percentages which is greater than Lagos. This is inline with the Nigerian population where Kano is the highest and being the centre of commerce. With regards to the respondents’ number of employee less than 20 has the highest percentages, this testify that most of SMEs are small in nature In a similar way, The numerous number of the respondents amounting to 50 percent operate with total assets not more than 1million Nigerian naira.


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IJMRR/ April 2013/ Volume 3/Issue 4/Article No-6/2733-2739 Table 2: Demography of respondents S/N Items 1 Year of existence: Less 5 years 5-10 years 11-20 years 21-40 years 40-above 2

3

4

5

6

Frequency

Percentages (%)

34 7 0 1 0

81 16.6 0 2.4 0

Location: Kano 36 Lagos 6 Ownerships: Individual 27 Partnerships 8 Joint ventures 3 others 4 No. Of employees: Less 20 29 21-40 2 41-60 2 61-80 1 Above 80 8 Activities: Manufacturing and beverages 23 Tobacco processing 3 Textiles materials 3 Weaving, dying & dressing 7 Tanning, lather, luggage & 3 handbags Wood & export furniture 1 Paper & paper products 1 Recycling 1 others 0

Total assets: Less 1 million 1-100 101-200 201-300 301-above

21 9 6 3 3

85.7 14.3 64.3 19 7.1 9.5 69 4.8 4.8 2.4 19 54.8 7.1 7.1 16.7 7.1 2.4 2.4 2.4 0

50 21.4 14.4 7.1 7.1

3.3 Data Distribution: Usually the inferential statistical methods necessitate the completion of normality hypothesis (Pallant, 2001; Tabacknich & Fidell, 2007). Regular data is the one that is reasonable, bell-shape, with the highest occurrence of scores in the middle and smaller distribution towards the extreme ends. Normality can be measure by using the values of skewness and kurtosis. Although skewness deal with the symmetary, kurtosis shows the degree to which the data is peak or flat (Tabacknich & Fidell, 2007). Copyright © 2012 Published by IJMRR. All rights reserved

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4. CONCLUSION The Objectives of this study is pilot study is the validity and reliability of the instrument of a continuous project in homework for the main study. Consequently, the conclusion of this research is attached to its aims which are mainly statistical in nature at this end. The connotation of the variable would be fully exposed after the main study is carried out. The study brings the few scale data that was collected during the pilot study. Content and face validity were carry out which consequently led consideration of specialist view to attain the revised version of the instruments. Moreover, the inter-item reliability test indicated that all the items were reliable with Cronbach Alpha well above the benchmark of 0.70; by this means no items was deleted. Finally, normality test using skewness and kurtosis shows that the data as an entire is rationally normal. REFERENCES Ahmad NH, Ramayah T. Does the notion of ‘Doing well by doing Good’ Prevail among entrepreneurial ventures in a developing nation? Journal of Business Ethics 2012; 106: 479490. Alreck PL, Settle RB. The survey research handbook. Second edition, Boston: Irwin, 1995. Cavana R, Delahaye BL, Sekaran U. Applied Business Research: Qualitative and Quantitative Methods. Singapore: Markono Print Media Ltd, 2001. Churchill GA, Peter JP. Research design effects on the reliability ofrating scales: A metaanalysis. Journal of Marketing Research 1984; 21(4): 360-375. Ellen PS, Webb DJ, Mohr LA. Building Corporate Associations: Consumer Attributions for Corporate Socially Responsible Programs, Academy of Marketing Science 2006; 34(2): 147– 157. Gay LR, Mills GE, Airasian P. Educational research: Competencies for analysis and applications (8th ed, 2006). Uppersaddle River, New Jersey: Pearson Education International, Inc. Gorondutse AH, Hilman H. Business Social Responsibility (BSR) and Small and Medium Enterprises (SMES) Relations: Evidence from Nigerian Perspectives. International Journal of Management Research and Review 2013; 3(2): 2346-2354. Gorondutse AH, Hilman H. The influence of Business Social Responsibility (BSR) on Organizational Performances: A pilot Study. International Journal of Business and Management Tomorrow 2012; 2(12): 1-6. Hair JF, Black WC, Babin BJ, Anderson RE, Tatham RL. Multivariate data analysis (6th ed.). Uppersaddle River, New Jersey: Pearson Education International, Inc, 2006. Hair JF, Money AH, Samouel P, Page M. Research methods for business. Chichester: John Willey & Sons Ltd, 2007. Hair JF, Black WC, Babin BJ, Andersen RE, Tatham RL. Mutilvariate data analysis (7th ed.). Upper Saddle River, NJ:Pearson Prentice Hall, 2010.


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