THE TRANSITION OF CSR ACTIVITIES IN FAMILY-RUN BUSINESS FROM 1st AND 2nd GENERATION: EMPLOYEE PERCEPTIONS FROM EASTERN THAILAND

Many Thai scholars suggest that the Corporate Social Responsibility (CSR) concept has been imported to Thailand by foreign companies, many of which have active CSR programmes which are often formalised. However, there are... [ view full abstract ]

Many Thai scholars suggest that the Corporate Social Responsibility (CSR) concept has been imported to Thailand by foreign companies, many of which have active CSR programmes which are often formalised. However, there are family-run business in Thailand (FRBT) that practice a form of CSR that is driven by the mentality of “giving back to the society”, influenced by religion and culture. This suggests that, while the concept of CSR have been introduced to Thailand over decades by Western and European countries, family-run businesses (FRBs) have practised their own interpretation of CSR. Many scholars assert that first-generation FRBs are primarily concerned with the businesses’ survival and growth in order to pass them on to further generations. With sufficient size, its priority often shifts towards improving the company’s profitability. Literature has shown that the transition from survival or growth to profitability is often crystallised in the transition from first-generation to second-generation business owners. This could be because successions have acted as focal points where firms’ emphasis changes, as a result of a gradual transition, or it may simply reflect differences in priorities as perceived by different owners. In addition, past research has suggested that FRBs, especially small and medium sized ones, approach CSR differently from larger companies and corporations. However, even first-generation FRBs, who have struggled to survive, engaged in CSR-supporting practices. Business successors, who often are more focused on profitability, will be active in CSR differently by emphasising more on treating their employees well and caring for society. Thus, this study intends to explore differences in forming and practicing CSR, how the FRBs practise their CSR activities and how such activities are perceived by their employees.

This research is based on distributing 3,000 questionnaires to employees of 28 FRBs in Eastern Thailand, with 2,352 respondents in total, 310 were from first and 2,042 from second generation companies. SPSS has been used to interpret differences in employee perceptions on CSR activities between the first and second generation owners. Frequency counts and crosstab analysis has also been used to understand overall characteristics of the collected data. After which, factors analysis has been used to reduce number of variables. Lastly, Cluster analysis has been used to identify homogeneous group of respondents into 5 clusters.

Overall, the results from cluster analysis has shown that employees in the first generation recognise CSR activities that are happening more, especially from their owners. In contrast, second generation’s employees notice less CSR activities from their owners but they are able to notice CSR program from their company. In addition, perceptions of CSR practice were clustered and labelled as 1) Inactive CSR 2) Active CSR 3) Caring Company 4) Moral Owner 5) No CSR with a clear split in distribution between 1^st and 2^nd generation owners. In conclusion, first-generation business owners practice CSR driven by their own morality but second-generation owners adapt CSR into company’s CSR program. Therefore, employees who work for the first-generation owners appreciate the effects from CSR activities more than employees under second-generation owners.