مسئولیت اجتماعی شرکت ها، تعیین معیار و عملکرد سازمانی در صنعت نفت: چشم انداز مدیریت کیفیت

The purpose of this paper is to investigate the effect of corporate social responsibility and benchmarking on organizational performance in the petroleum industry. We find that top management support for quality is the main driver of practices associated with corporate social responsibility. Corporate social responsibility appears to have a significant impact on internal quality results (operational performance) but it does not have a significant effect on external quality results (firm performance). We did not find a very strong relationship between benchmarking and internal/external quality results. Our findings suggest that the implementation of corporate social responsibility in the petroleum industry is economically driven. Recommendations for managers and future research have been outlined.

Quality management (QM) has emerged as a management paradigm for enhancing organizational effectiveness and competitiveness (Grandzol and Greshon, 1997, Dow et al., 1999, Sanchez-Rodriguez and Martinez-Lorente, 2004 and Sila, 2007). Several empirical studies suggest that firms achieve higher levels of profitability and organizational performance through successful implementation of practices associated with quality management (Powell, 1995, Easton and Jarrell, 1998, Das et al., 2000, Douglas and Judge, 2001, Kaynak, 2003, Yeung et al., 2006, Mesut, 2009 and Kull and Narasimhan, 2010). Historically, the concept of quality has evolved from quality control and using statistical methods to address practices such as employee involvement and a culture for change and innovation (Dean and Bowen, 1994, Powell, 1995 and Perdomo-Ortiz et al., 2009). More recently, the concept of quality has broadened its scope to the supply chain, addressing quality issues dealing with activities and processes between the firm, its suppliers, and customers (Foster, 2008 and Kaynak and Hartley, 2008). Nevertheless, the level of an organization’s interaction and engagement with its environment – which is referred to as social responsibility or corporate social responsibility – has received little attention, especially within operations management. Socially responsible organizations tend to address issues such as public health, public safety, and environmental concerns and integrate them into their quality plans (Rao et al., 1999). Organizations have realized the strategic importance of corporate social responsibility where more than 90% of Fortune 500 firms have invested in corporate social responsibility (Kotler and Lee, 2004 and Lichtenstein et al., 2004). However, the effect of socially responsible practices on firm performance is still a debatable issue (Russo and Fouts, 1997 and McWilliams and Siegel, 2001). We aim to address these gaps in the literature. This study seeks to determine the effect of corporate social responsibility and benchmarking on internal and external quality results in the petroleum industry. To do so, we conceptualize corporate social responsibility within the quality management framework (Punter and Gangneux, 1998, Kok et al., 2001 and Barrett, 2009). Accordingly, the study contributes to theory validation and development in quality management by investigating the effect of corporate social responsibility on operational and firm performance. We find that top management support for quality is the main driver for corporate social responsibility practices. In addition, our findings provide empirical evidence on the indirect link between corporate social responsibility and firm performance. Corporate social responsibility has a direct effect on improving internal quality results (operational performance) while it has an indirect effect on external quality results (firm performance). Furthermore, the study contributes to the body of knowledge in the management of quality in process industries, such as the petroleum industry. Some argue that there needs to be more research on the application of quality management in process industries (Dennis and Meredith, 2000). Specifically, Sousa and Voss (2002) indicated there is a need to test existing instruments to measure quality management practices in large companies in well-developed industries, such as process industries. Our study also aims to fill these gaps in the literature. The remainder of the paper is structured as follows: First we address the theoretical perspectives on the diffusion of management theories across nations. Later, we explain the concept of corporate social responsibility and benchmarking and their relationship to organizational performance. Based on the review of the literature, we present our hypotheses. We later provide some background on the petroleum industry in order to provide more insight on the significance of this study. We discuss our methodology including the sample, the analysis and the results. Finally, we discuss our findings, provide the managerial implications, and address the limitations/future research.

This study contributes to our understanding of the effect of corporate social responsibility on organizational performance. To the best of our knowledge, it is the first study that addresses corporate social responsibility within the context of the petroleum industry. Our findings suggest that top management support for quality is the main driver for corporate social responsibility practices. In addition, the availability of quality information has a positive impact on corporate social responsibility. In terms of organizational performance, social responsibility has a positive and significant effect on internal quality results (operational performance). However, the effect of corporate social responsibility on external quality results (firm performance) is not significant. The results from the structural model reveal that top management support for quality is significantly related with external quality results. This shows that top management plays a very critical role in promoting quality management implementation in the petroleum industry. Previous studies have shown the indirect link between top management and organizational performance (e.g. Wilson and Collier, 2000 and Kaynak, 2003). Similar results have been reported on the role of top management in the US domestic airline industry. Within the US airline industry it has been argued that in the regulatory environment the profitability of an air carrier was ultimately determined by organizational leaders (Ramaswamy et al., 1994). Iranian petroleum industry is regulated, and companies should do business according to the rules and policies set by the government. This may suggest that in regulated environments and within the capital-intensive industries top management plays a very important role on the effectiveness of quality programs and organizational performance. According to Table 7 the regression coefficients between top management support and all other quality practices are significant which confirms the importance of top management support for quality systems. One important finding of this study is the effect of social responsibility on internal quality results. We did find a positive link between corporate social responsibility and internal quality results. However, the relationship between corporate social responsibility and external quality results was not significant. In fact, the regression coefficient was negative, which indicates that such practices have negative (though not significant) effect on firm performance. Since the regression coefficient between social responsibility and internal quality results is significant (p<0.1), and there is a positive (and significant) link between internal quality results and external quality results (p<0.1), we can conclude that corporate social responsibility practices have an indirect effect on firm performance. As Asrilhant et al. (2007) indicated the petroleum industry “appears to be attached to financially oriented decisions, focuses on financial and environmental (green) issues, seeks to control the efficiency of tangible assets, resists changing current routines and overemphasizes short term interests such as those of shareholders, sometimes at the expense of customers and employees”. In their analysis of oil and gas companies, Guenther et al. (2007) argued that the interest of oil and gas companies in social responsibility practices is primarily economically driven. This suggests that corporate social responsibility practices in the petroleum industry are motivated by financial outcomes. Our findings suggest that there is an indirect link between corporate social responsibility and firm performance. While the effect of corporate social responsibility on firm performance is a debatable issue (e.g. Russo and Fouts, 1997 and McWilliams and Siegel, 2001) there is evidence in the literature that supports an indirect link between corporate social responsibility and firm performance. For example, Luo and Bhattacharya (2006) found that customer satisfaction plays a significant role in the relationship between corporate social responsibility and market value. Their findings provide empirical evidence on the mediating role of customer satisfaction on the relationship between corporate social responsibility and firm performance. Empirical and anecdotal evidence suggest different forms of relationship between corporate social responsibility and firm performance. It appears that the effect of corporate social responsibility on firm performance is positive in organizations with high quality products and high level of innovation, and sustained customer satisfaction over time (Luo and Bhattacharya, 2006). Some organizations view corporate social responsibility practices as an added cost to their operations where it diverts the resources to activities that do not necessarily address product/service quality. As such, it could negatively affect customer needs and preferences (McGuire et al., 1988 and Sen and Bhattacharya, 2001). This is what Luo and Bhattacharya (2006) refer to it as the “dark side” of corporate social responsibility. In that regards, the negative correlation between corporate social responsibility and external quality results (b=−0.878, p>0.1) could be related to the costly nature of corporate social responsibility practices to firms competing in the oil and gas industry. Therefore, future studies should test the role of moderating variables such as customer focus, industry competitiveness, or the rate of innovation and change in the relationship between corporate social responsibility and firm performance. The study provided some insight to validate the contingency theory of quality management. According to the contingency theory, some management practices may or may not be effective in certain organizational contexts(Doty et al., 1993; Damanpour, 1996;Gresov and Drazin, 1997). The prevalence of contingency theory has been empirically tested within quality management where organizations operating in different contexts can achieve similar effective business results by emphasizing different quality practices (Zhao et al., 2004). Looking from the perspective of the contingency theory of quality management, our findings suggest that improvement in operational performance (internal quality results) is significantly related to firm performance (external quality results). This along with the important role of top management are significant predictors of organizational performance in the petroleum industry. Within the petroleum industry, profitability of oil and gas companies is heavily influenced by external variables (e.g. political and economic turbulences as well as the bargaining power of oil producing organizations such as OPEC). Therefore, compared to other industries the effect of top management in organizational performance is much stronger in a turbulent environment such as the petroleum industry.