A comparative investigation into the effect social responsibility measures/activities have on the business performance of start-ups In Netherlands and Hungary over the initial 2 years of the introduction of such measure

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Master Thesis Work

written by Tamás Sándor Nagy (11087471)

A Comparative Investigation Into The Effect Social

Responsibility Measures/Activities Have On The Business

Performance Of Start-ups In Netherlands And Hungary Over

The Initial 2 Years Of The Introduction Of such Measures/

Activities

University of Amsterdam  MSc Business and Administration 

Entrepreneurship and Innovation Academic year: 2015-2016 Supervisor: Emiel Eijdenberg 

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Statement of Originality

This document is written by Student Tamás Sándor Nagy who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents. 

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4.2.2. Market Related CSR ...35 4.2.3. Community Related CSR ...36 4.2.4. Environment Related CSR ...37 4.2.5. Regulation Related CSR ...38 4.3. Correlation Analysis ...38 4.4. Regression Analysis ...43 4.4.1. Hungarian Sample ...43 4.4.2. Dutch Sample ...45 5. Discussion ...46 5.1. Summary of Findings ...46

5.1.1. General Business Performance Patterns ...47

5.1.2. Corporate Social Responsibility with Startups ...49

5.1.3. Business Performance Indicator: Employees ...51

5.1.4. Business Performance Indicator: Clients ...52

5.1.5. Business Performance Indicator: Sales Transactions ...54

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5.1.7. Business Performance Indicator: Sales Growth After the Adoption of CSR Policies ... 56

5.2. Limitations ...57

6. Conclusions and Recommendations ...59

7. Appendices ...65

7.1. List of Calculated Variables ...65

7.2. Correlation Table – Hungarian Sample ...66

7.3. Correlation Table – Dutch Sample ...67

7.4. Invitation Of Letter To Fill In A Questionnaire - Dutch Startups ...68

7.5. Invitation Letter To Fill In A Questionnaire - Hungarian Startups ...69

7.6. Link Of The Survey - Dutch Startups ...70

7.7. Link Of The Survey - Hungarian Startups ...70

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List of Figures and Tables

Figure 1 -Research concept schematics...14

Figure 2 - Outliers removed...21

Figure 3 - With outliers...21

Table 1 - Tested regression models...23

Table 2 - Means of business performance indicators before and after adoption of CSR policy 25... Table 3 - Internal workforce-related CSR dimensions...26

Table 4 – Market-Related CSR dimensions...27

Table 5 – Community-Related CSR dimensions...28

Table 6 – Environment-Related CSR dimensions...28

Table 7 –Regulatory CSR dimensions...29

Table 8 –Correlation analysis – Hungarian Sample...30

Table 9 –Correlation analysis – Dutch Sample...31

Table 10 - Regression models summary - Hungary...33

Table 11 - Regression models summary – The Netherlands...34

Table 11 - Correlation Table - Hungarian Sample...48

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1. Introduction

Corporate social responsibility is one of the kernel concepts of today’s business environment. Recent studies and academics (e.g. Porter and Kramer, 2006) indicate that CSR does not only address the question of fair conduct of business, thus a contributor to sustainable development, it is also a potential source of competitiveness. It is especially true for the small enterprise segment, for they are deeply embedded in their immediate social, environmental and economic setting. Additionally, the characteristically lean corporate structure of small and young enterprises does not separate their leaders from their environment, therefore the maintenance of their personal integrity calls for the consideration of a wide variety of stakeholders. The such entrenched stance of small enterprises is arguably of vital importance from the perspective of the business value of corporate social responsibility for the sector, as it has the potential to provide a partnership nexus, a communication platform and a value transmitting device between the corporation and its immediate community. This paper will cite a number of academic a vocational sources to back this claim. While the existing studies will be detailed in great depth in Section 2 (Literature Review), it is worth noting already at this point that responsible conduct is identified to establish the firms credibility, customer loyalty, employee retention and it may contribute to a sustainable bottom line performance by aiding building a clientele. Despite the positive drivers of socially responsible business conduct, SMEs and startups are not always in an accommodating position to easily implement CSR policies. Among the difficulties it is widely recognized that they are more frequently than not are constrained by the availability of resources, lack of long-term perspective, the dearth of clarity in business perspective, the arbitrary capabilities of the central decision maker, and the personal agenda of the owner / manager.

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Ultimately, the small and startup business owners need to make considerable efforts to come to terms with their capabilities, resources and business network alike to map out their roadmap to a sustainable future, in which CSR policies are paramount items of worth, but also the of cost.

On a theoretical level, the evolution of the notion of responsible business conduct has reached a point where it is no longer regarded as conflicting with business performance. As it will be demonstrated in Section 2.1, a range of theorists (e.g. Carroll, 1979; Drucker, 1984; Freeman, 1984 & Frederick, 1986) and the empirical evidences (Mandl & Dorr, 2007; European Competitiveness Report, 2008) suggest that the conflict between social responsibility and business performance is ostentatious and it is outright possible, even desirable to pursue both. At the same time, the practical evidences have been primarily collected in the sphere of larger corporation, while the SME and startup landscape is relatively uncharted from the perspective of social responsibility. While difficulties caused primarily by the fragmented nature of the small enterprise scene justifies the relative lack of attention, this is a serious impediment, for the aggregate value of the SME and startup sector is dominant both from the macro level aspects of employment, social stability and taxation. Thus, embracing ethical business conduct by the business startups and SMEs can be even more impactful than that by the large volume conglomerates.

With the recognition of the difficulties with regard to the implications of the socially responsible business conduct in the small enterprise sector, this paper sets to be a worthwhile addition to the accumulated understanding of the relation of business performance and embracing a CSR policy framework by startups. Along with the recommendations of a set of researchers (Delmar &

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Davidsson, 1998, Delmar et al., 2003; Havnes & Senneseth, 2001; Johnsen & McMahon, 2005, Locke, 2004; O’Gorman, 2001), this paper appreciates the complexity of measuring business success. As corporate performance can show a very diverse picture depending on the selection of metrics, the above sources forward approaches that rely on multiple metrics to identify a multidimensional portrait of corporate success. In a similar fashion, corporate social responsibility is a multifaceted phenomenon. It has a variety of components entailing items related to the businesses’ attitude towards the community, towards their own workforce, towards the environmental values, towards their clients and towards the regulatory framework. This diversity is understandable, since the underlying notion of social responsibility is simply ethical conduct, which can be translated to nearly any aspect of the business practice.

Reflecting to the complexity of measurement and the convolutedness of the composition of the subject of CSR, the investigation spares no effort when it comes to the question of research design. With regard to the CSR perspectives, the tested variables include an extensive set of items are collected that cover the full scope of corporate responsibility, entailing workforce-related, community-workforce-related, market-oriented, environment-oriented items with the addition of the perspectives imposed by the regulator. The internal structure of the tested variables will be assessed by principal component analysis to learn if the respondents recognize the intrinsic internal belonging of the social responsibility dimensions. Through this exercise, it will be revealed if the examined aspects of ethical conduct formulate conscious groups among the respondents.

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Regarding the performance metrics, a similarly wide-scale set of dimensions are deployed, so as both to investigate whether the potential aspects of business performance are affected differently by the factors of CSR and, to ensure that no perspectives of corporate success criteria escapes detection. The range of such criteria involved in the research are the number of employees, the number of sales transactions, the volume of sales, the number of clients and the growth rate of sales. Since the above dimensions are inquired both before and after the adoption of socially responsible business conduct of the firms of the respondents, they are highly capable to capture the detailed impact of encompassing CSR factors in the business practice.

The relation of the performance metrics and the CSR dimensions will be tested principally by the statistical method of regression analysis translated to ten models that correspond with the hypotheses of the thesis. The models will be fed with data from two distinct European jurisdictions, so as to extend the scope of observation and also to have an internal base of comparison. While the selection of the jurisdictions (the Netherlands and Hungary) may seem arbitrary, the rationale of their inclusion is motivated by my personal background: I call Hungary my home country and I currently live and study in the Netherlands. However, the personal exposure to these countries on emotional and professional levels, they also represent two very different economic and to a degree cultural environments, which diversity is a valuable addition to the research.

The ultimate goal of the rather complex design of the empirical research is to address objectively answer the postulations of this paper. Each of the hypotheses are positively worded, thus they assume positive relationships between the CSR consciousness of the startups and the business

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performance indicators. At the end of the empirical observation and statistical testing, the paper will demonstrate that in spite of the academic theories and the previous empirical studies concentrating on larger corporations, none of the success dimensions of SMEs seem to be principally driven by their adoption of socially responsible policy measures. What is more, it will be shown that this pattern holds universally true both among Hungarian and Dutch startups. While these findings are surprising on face value, the results of this paper will suggest that unlike larger, better furnished corporations, it is not necessarily effective for small enterprises to pursue activities that are in an indirect relationship with their immediate business goals.

2. Literature Review

2.1. Corporate Social Responsibility

The notion of socially responsible conduct in the corporate world appears on the radar under a sprawling number of names. May it be referred to as corporate social responsibility (CSR), corporate sustainability (CS), corporate citizenship (CC), triple bottom line (TBL) or socially responsible behavior (SRB), they are arguably synonymous facets of the single underlying idea: ‘ethical business’. This multiplicity is captured by Carroll (1994, p14) as “[it is] an eclectic field with loose boundaries, multiple memberships, and differing training / perspectives; broadly rather than narrowly focused, multidisciplinary; wide breadth”. To complement the diverse realization of the term, Garriga & Melé (2004) identify four dimensions of CSR:

(1) Instrumental speculations conceive the concept as a key apparatus to achieve benefit (Friendman, 1970) through the increasing shareholder value (Jensen & Meckling, 1976), through providing competitive advantage (Porter & Kramer, 2006) or through use

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(2) Political hypothesis consider the concept to be a tool for organizations to utilize their social capabilities (Davis, 1960) through assuming a role in enclosing social matters, fulfilling social obligations and providing social rights (Davis, 1960). From this perspective, CSR plays out as social contract to mediate interaction between the business and the society, and positions firms and corporate citizens (Andriof & McIntosh, 2001).

(3) Integrative considerations view CSR as a corporate tool of response to social requests and it generates social authenticity and glory through addressing societal issues (Sethi, 1975), open obligations (Preston & Post, 1981), partner administration (Ogden and Watson, 1999), and execution of social administration (Carroll, 1979)

(4) Ethical dimension regards CSR as a moral prerequisite of social decency through securing human and work-related rights (Cassel, 2001), through advancing and actualizing reasonable improvement measures (Van Marrawijk & Were, 2003), and through advancing common good (Velasquez, 1992).

Despite the contemporary aura of corporate social responsibility, it has decade long roots. The soonest commitment to the CSR complex came about in the 1950s, when Bowen (1953, p6) proposed a definition: “obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society”. Since then, companies have increasingly paid attention to social measures and they have gradually broadened the range of their socially responsible practices, which has been reinforced by the public opinion of the extensive and less than adequately controlled corporate power. The idea of CSR has progressively developed in spite of the inescapable skepticism (Friedman, 1962) and a growing body of studies embarked to refine the components, character and guidelines of CSR (Manne & Wallich, 1972). The kernel notion of the studies was

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that socially capable organizations need to act voluntarily, as in beyond obeying legislative regulations, to fit the CSR standards (Davis, 1973). Further, a set of academics (e.g. Ackerman, 1975; Preston & Post, 1975) pointed out the relevance of the harmonious relationship of and the social connection between the society and the organizations, as the ultimate source of authenticity must be the society. Along this line, sources do not strip business partnerships from their right to bolster long term monetary interests, but they fundamentally require corporations to pursue, “detection and scanning of, and response to, the social demands that achieve social legitimacy, greater social acceptance and prestige” (Garriga & Melé, 2004, p58). This view gained gravity throughout the 1970s and 1980s and academics of the era sought to synchronize the corporate goals with the needs of the society. Carroll (1979) identifies CSR as an essential business practice, and Drucker (1984) recognizes a positive connection between exploiting business opportunities in pursuit of profit and the social obligations of the firms.

The concept was solidified by expanding the definition of ‘stakeholder’ from the conventional owner to “those groups who can affect or are affected by the achievement of an organization’s purpose” (Freeman, 1984, p49). The source forwarded the partner hypothesis, which claims that individuals having a connection to the organization to be considered as ‘capable players’. In spite of the various interpretations of the partner hypothesis, it is commonly understood “to explain and to guide the structure and operation of the established operation” (Donaldson & Preston, 1995, p70). The socially responsible corporate behavior crystallized in the partnership hypothesis imply more than a strategic consideration of the involved partners: they infer the objective to deliver superior good for the society. Frederick (1986) composes that corporate social integrity

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translates to mindfully adopting appropriate values, moral codes and just motivations in firms. Thus, the CSR mindset is not merely another product or a consciously designed aftereffect of corporate operations; it needs to be incorporated in the fundaments of leadership and it needs to be actively assessed and gauged (Jones, 1980).

In the 1990s and 2000s, the partner hypothesis further evolved to the ‘instrumental and administrative’ stakeholder theory (Clarkson, 1995; Donaldson & Preston, 1995; McWilliams & Siegel, 2001) to the social contract theory, to the triple bottom line (Elkington, 1997, Norman & MacDonald, 2004) and to the ISCT, the integrative social contract theory’ (Donaldson & Dunfee, 1994).

“All organizations, wherever situated, and whatever their characteristics, must recognize the interests of stakeholders whenever failing to do so may violate a hypernorm […] It then becomes the obligation of all organizations to recognize this principle in regard to stakeholders […]. Thus, […] an organization that sells carcinogen-contaminated pajamas in the Third World, knowing the are prohibited for sale in the US and Europe and are unacceptably dangerous to their intended users, fails to recognize a mandatory stakeholder duty.” Donaldson & Dunfee (1999,

p247).

Today, the primary vehicle of the CSR mindset is generally associated with the stakeholder model, which focuses on the organizations’ reference connections and the classification of their partners. (Dunfee, 1991; Hansas, 1998). The stakeholder model offers a framework to adjoin

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financial growth, social integrity and the natural environment so as to create value in a greater sense: “[it is] defined in terms of the responsiveness of business to stakeholder’s legal, ethical, social and environmental expectations, CSR is one outcome of these developments” (Raynard & Forstater, 2002, p6). In pursuance of this goal, Philips (2003) recognizes the notion of partner authenticity, which has two classes: one group contains the stakeholders with immediate relevance, while the second comprises of derivative stakeholders, whose authenticity grows on moral and regulatory ground. Contemporary researches aim to elaborate on this distinction (Dunham et al. 2006) and the relevant political bodies and vocational organizations seek ways of implementation. The academic development of the concept of ethical business conduct is escorted by the evolution of practical implementations (Tencati et al, 2004; Zadek, 2002). Latter is facilitated by pan-national organizations that encourage the spread of the concept. The European Union defines the notion as “a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment [and] whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”. (European Commission, 2001). Refer to Box 1 for alternative administrative – political interpretations.

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2.2. Small Businesses and Social Obligations

Conventionally, small businesses are distinguished from their larger counterparts by their turnover, available resources, market share, employees and ownership structure (Curran & Blackburn, 2001), although the demarcation considerably varies (Hillary, 2000a, Spence, 1999). In EU terms, small businesses are defined as (1) employing less than 50 persons and (2) generating under 10 million EUR annually, and they are generally considered to be cocoons of larger organizations (European Commission, 2003b), which definition is extended by Spence (1999) with the requirement of being managed by the owner. Although SMEs are frequently regarded as homogeneous in their traits (Wilkinson, 1999), their conduct is rather diverse, as their managers tend to espouse customized style of the administration (Bolton, 1971).

With regard to the social responsibilities of small businesses (SBSR), this paper adopts the definition of “Dependable Enterprise” proposed by the European Commission (2003b), which renders the term conditional to five traits. A DE (1) treats its partners reasonably and trustworthily; (2) considers the well-being, security and prosperity of its employees and clients; (3) propels its employees by offering development opportunities; (4) behaves decently by the community standards; (5) is conscious about the assets and about the nature. This character is promoted by the small scale of SMEs, as the trait of sharing ownership with management is widely associated with credibility and accountability, and also by the fact that the adoption of CSR policies is a relatively low-risk and low-cost exercise. In accordance with this, a number of studies underscores the positive development of CSR among SMEs (DTI, 2001, 2002; European Union 2004, EC & Observatory of European SMEs, 2002, Joseph, 2000, MORI, 2000).

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compliance with social and environmental standards, which is supported by the recognition of Bacon et al. (1996), Gibb (2000) and Hillary (2000) that SMEs tend to lag in terms workplace conditions, fair distribution of resources within the organization and respecting the natural environment. Addressing such challenges is hindered by the relative scarcity of literature on the subject of CSR practices on SMEs, which obstacle is recognized by Grayson (2004), Spence (1999), Spence et al. (2000), Spence & Lozano (2000), Spence & Rutherford (2003), Spence & Schmidpeter (2003), Spence et al. (2003), Thompson & Smith (1991), Tilley (2000) and Vyakarnam et al. (1997). The lack of scholarly and vocational attention is even more palpable in the developing regions, as pointed out by the Place for Social Markets (2003), Luken & Gazes (2005), Raynard & Forstater (2002) and the Maintainability (2002), which is a considerable impediment due to the SMEs weight in the OECD countries. Bridging the observation gap is crucial, since the CSR experiences of large corporations cannot be directly transferred to the SME segment (Spence & Rutherford, 2003).

The reason of the lack of sufficient data on the SME sector is partly caused by its fragmentation, which fact deters mapping out the social capital landscape. Putnam (1993, 2000) proposes that social capital is a natural addition to physical capital and human capital, referring to the “connections among individuals – social networks and the norms of reciprocity and trustworthiness that arise from them” (Putnam, 2000, p19). The intangible resources of notoriety, trust, authenticity and agreement are parts of the social capital (Spence et al. 2003, 2004), which are all vital components of SME success (Adler & Kwon, 2002; CSR Campaign, 2003; DTI, 2002b, Raynard & Forstater, 2002; World Business Council for Sustainable Development, 1999).

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The involvement of the small and young businesses in social responsible causes was studied by the European Commission (2002) delivering invaluable learning: (1) Regardless of their sectoral belonging, half of the European SMEs sign in to some sort of social responsibility programs. (2) Although 75% of the European SMEs recognize the advantages of adopting CSR policies (among which developing client relations seems to be the most relevant), they tend to refrain from incorporating them in their business conduct. This finding underpins Jenkins (2004) and Moore & Spence (2006), who claim that it is unrealistic to expect deep, HR level integration of CSR practices in small ventures one may expect from larger corporations. (3) When engaging in CSR programs, they prefer local causes, such as games, community welfare and protection of the local environment. This finding is in accordance with Jenkins (2004) and Spence (2000), who argue that local social integration for SMEs can be even more vital than advertising, as it may effectively substitute a dedicated PR strategy. Additionally, Spence (2004) draws attention to the fact that physical vicinity often translates to moral proximity, which is the home turf of CSR. (4) SME engagement in CSR activities positively correlates with the convolutedness of their social network, education of the owners and their foreign relations. The relevance of the personal character finds support in Quinn (1997), who establishes that the highly centralized personal control means that the owner / manager of the small enterprise may decide spending the firm’s resources as s/he sees fit, which makes SME spending a question of personal integrity that cannot be veiled by a complex organizational setting (Spence, 2004). Further, it is not uncommon that the employees and the minority owners of small enterprises are family members, which setting permeates the firm’s decisions with family values that are deeply embedded in the

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immediate community. Consequently, the business and family obligations may get inseparably entangled (Janjuha-Jivraj, 2004; Jenkins, 2004; Spence et al., 2004).

Besides the numerous positive drivers of adopting a socially responsible conduct for small enterprises, researches identify negative patterns as well. While large firms tend to be clear about their purpose of maximizing their profit, which adds a solid framework to assess the value of CSR policies, SMEs are not always distinct about their goals. Goffee & Scase (1995) as well as Spence (2000) recognize that SME owners may be motivated by pursuing entrepreneurial independence, autonomy or personal challenges, none of which directly supports social responsibility.

2.3. Business Performance of Small Enterprises

The development of companies in the SME classification can be measured with a variety of dimensions (Delmar et al., 2003; Freel & Robson, 2004; Havnes & Senneseth, 2001; Westhead & Birley, 1995). From the regulator’s perspective, the prime gauge is the number of employees (Hoogsta & van Dijk, 2004; Chaganti et al., 2002; Smallbone et al., 1995; Davidsson & Delmar, 1997), which is in line with the contribution of SMEs to reducing unemployment. Besides the number of jobs, SME development can be scaled by their turnover (Kelley & Nakosteen, 2005; leBrasseur et al. 2003; McMahon, 2001), which financial perspective is often approximated by measuring return of investment, productivity or market share. As it is often desirable to detach the financial component and the operational effectiveness, the number of deals (i.e. deals turnover or number of sales transactions) is also a frequently deployed marker (Delmar et al,

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measuring the value of assets of the firm (essentially the level of invested capital), but according to experiences it tends to be fluid in case of small businesses. The above markers are not always in synch with each other (Delmar, 1997) and it is not always straightforward to judge their scope of relevance and their appropriateness (Chaganti et al., 2002). Typical controversies are number of employees vs. sales volumes or number of sales transactions vs. profitability. Resultantly, the academics generally suggest to deploy more than one marker to detect the objective business performance of SMEs (Delmar & Davidsson, 1998, Delmar et al., 2003; Havnes & Senneseth, 2001; Johnsen & McMahon, 2005, Locke, 2004; O’Gorman, 2001).

From a different perspective, the evolution of small enterprises can be measured both in absolute and in relative terms. Since the absolute figures tend to be misleadingly muted in the SME sector due to the size constraints, the relative measures are generally considered to be more reliable (Davidsson & Henkerson, 2002; Smallbone et al. 1995; Feeser & Willard, 1990; O’Gorman & Doran, 1999).

2.4. The Startup Landscape

Although startups are frequently misconstrued for small enterprises, there are notable differences between the two categories. This mistake used to be common even among investors and regulators, who regarded new companies as baby-size large corporations, which drove them to ineffectively invest or subsidize them by their potential to grow big. The confusion partly derives from the definition of entrepreneur. According to The Economist (2014), the popular view holds that “entrepreneurs are people who run their own companies, the self-employed or small business

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and arguably more accurate view of Schumpeter (1949) defining the “model of Schumpeterian entrepreneurship in which founders exploit ideas they learned through their employment”. This Schumpeterian concept links the world of entrepreneurship with other constructs of employment and it is frequently interpreted that it adds the values of novelty and the ‘entrepreneurial spirit’ to the portrait. While the claim of novelty can be a part of entrepreneurship, Schumpeter (1949) clearly distinguishes “replicative” and “innovative” businesses – the former easily translates to conventional SMEs (and the majority of startups), while the general conception of an archetypical startup belongs to the innovative category, as they are perceived to disrupt the prevailing ways to offer new solutions and eventually grow big. Drucker (1985) claims that the novelty value and disruptive nature of the innovative entrepreneurs are not strictly restricted to product innovation, as it can be just as easily process innovation, rewording questions or giving a radically different answer to conventional problems. Further, while the public view on entrepreneurs often entails association to risk taking, even most innovative startups can be designed and developed systematically to minimize risk. From a procedural point of view, Blank (2012) argues that a startup is a “transitory association intended to hunt down a repeatable and adaptable plan of action”. Rooted in the rapidly changing tech world, the key component of the concept is versatility, which allows them to implement their agenda rapidly to stir the present market conditions. To place the notion of Blank (2012) in a wider framework, Clark (2015) identifies six different startup categories:

(1) Lifestyle startups. In this scenario a business visionary carries out a life of their personal choice with enthusiasm, which well corresponds to the definition of entrepreneurship by

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Schumpeter (1949), as the owners tend to transfer their previous experiences and ideas to a private venture.

(2) Small business startups. This setting is by far the largest among the startup categories, 99.7% of all business organizations belong to this category in the United States. SME startups are funded with private reserves with the goal of generating income for living for the family. They are relatively less productive and they do not intend to scale. In the Schumpeterian framework, small businesses are the typical replicative startups.

(3) Scalable startups. These adaptable new businesses are what investors seek. They are started as visions and they are led to grow big and generate value. Initial growth is typically fueled by risk capital.

(4) Buyable startups. This arrangement aims to make profit by recovering the sunk cost of development through selling the venture to large corporations. The financing of the construct is typically provided by angel investors who seek fast return on selling.

(5) Large company startups. The shortening life-cycle of products, ideas and concepts drive corporations to extend their product portfolio by establishing new companies or taking over buyable startups to develop.

(6) Social startups. This recently emerging class of startups aspires to make a social impact either on for-profit or for-benefit basis or any combination of these extremes.

2.5. Influence of CSR on Business Performance of Startups

As demonstrated throughout the literature review, corporate social responsibility is an expansive, complex and developing concept that entails a wide array of thoughts and practices (Munasinghe & Malkumari, 2012). Carroll (1979) opines that CSR is the financial, lawful, moral and optional set of expectations to which the society exposes the organizations. Wood & Jones (1995) state

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that the notion of partnership is of focal relevance, since this is what the society expects from corporations and this is the relationship framework in which it evaluates the firms’ actions. Consequently, CSR can be regarded as how and what the organizations give back to the community in forms of fair treatment of employees, providing quality output, sponsorship, waste management and financial contribution (Suprawan, De Bussy & Dickinson, 2009). Through demonstrating partnership, the organization is rewarded with authenticity (Jamali, Zanhour & Keshishian, 2009), improving business performance (Carroll, 1999) and diminishing risk (Jenkins, 2006a). This is especially true for SMEs that are more deeply rooted in their immediate community than their larger counterparts (Perrini, 2006).

With central importance for this paper Vaaland, Heide & Gronhaug (2008) identify four dimensions of CSR: the environment, the market (i.e. clients), the employees and the community. These elements of social responsibility individually and together are tested to have a long-term impact on the business performance of small enterprises. In accordance with the existing research practices (Kramer, Pfitzer & Lee, 2005; Mandl & Dorr, 2007; UNIDO, 2008; Szabo, 2008), the primary research of this paper utilizes the above dimensions – with the addition of regulatory considerations. The business impact is generally measured in a complex fashion with the inclusion of metrics such as deals volume, development rate, market share and shareholder return (Jamaludin & Hasun, 2007; Mandl & Dorr, 2007).

The primary research translates the above CSR dimensions and business performance metrics in the research design depicted in Figure 1.

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Figure 1 -Research concept schematics Source: own design

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2.5.1. Workforce-Oriented CSR Activities

The set of elements allude to those practices that aspire to enhance the working conditions of the employees. As per Fiori, Di Donato & Izzo (2007), social responsibility vis á vis the workforce translates to contribution to employee wellbeing, personal development, open door policy (i.e. inclusion, empowerment and participation), internal PR, job creation and job security. This set is extended by Jenkins, 2009) with inspiration. A research conducted among Austrian organizations by Mandl & Dorr (2007) demonstrates that 86% - 95% of the firms recognize the CSR relevance of the fair and equal treatment of employees, of implementing a reasonable compensation structure and that of fair contracting. The research conducted among Danish firms by the European Commission (2005a) exhibits that adoption workforce-related CSR policies have a positive impact on revenues and it contributes to employee retention and hiring. A Malaysian study among SMEs confirms that employee development programs can be strongly associated with building a capable human capital with productivity and waste reduction benefits, which in turn translates to bottom line performance gains. Further, Jenkins (2009) recognizes the link between market share and the implementation of a mindful work-life balance policy.

Based on the above empirical and academic findings, the paper formulates the following hypothesis:

H1: There is a positive relationship between the presence of workforce-oriented CSR policy and the business performance of startups.

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2.5.2. Community-Oriented CSR Activities

The community aspects of responsible corporate behavior are identified to have a positive impact on SME business conduct in nearly all European countries (European Commission, 2002) and in Latin America as well (Vives, 2006). A research led by Polášek (2010) expressively stresses imperative importance of employing community-oriented CSR policies for small enterprises that materialize in financial and non-financial contribution to social programs, volunteerism, aiding people, backing the wellbeing of the immediate social environment (e.g. sport events, educational activities, authorities, etc.). The motivation for such involvement is essential as SMEs operate in, therefore they are subject to, the general flourishing of their surrounding. Polášek (2010) finds that the involvement of the SME owner in community issues positively impacts the intensity of his / her business, and Schiebel & Pöchtrager (2003) recognize that it also aids the efforts to draw in financing and expanding venture capacity.

Against this backdrop, the following hypothesis is forwarded:

H2: There is a positive relationship between the presence of community-oriented CSR policy and the business performance of startups.

2.5.3. Market-Oriented CSR Activities

The dimension focuses on the SMEs actions to address the needs and wants of the clients by respecting their conditions, complaints, orders, information needs in a helpful way. Further, the dimension entails customer-friendly access points, decent conduct of business, fair pricing and fair treatment. According to the European Commission (2011), market-oriented CSR policies are

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also evident in the constant improvement of product / service quality, effective administration, convenience, collaboration with other suppliers in the value chain and around the neighborhood, as well as in demonstrating morality. As indicated by a study conducted among Danish SMEs, these items are all-important in the long-term profitability of the firms (European Commission, 2005b). Based on data collected among Czech SMEs, Polášek (2010) points out the competitive advantage potential of the market-oriented CSR arrangements. Ali et al. (2010) finds that such CSR policies play an active role in securing customer loyalty, consequently the long-term survival of the SME.

With consideration to the above findings, this paper seeks to answer the following hypothesis:

H3: There is a positive relationship between the presence of market-oriented CSR policy and the business performance of startups.

2.5.4. Environment-Oriented CSR Activities

The environmentally conscious and responsible business conduct alludes to assess the business impact of the efforts to reduce its negative effects on the habitat by sound utilization of financial and material resources, reusing resources, waste reduction, engaging in environmental programs, contamination control, etc. As suggested by the European Commission (2005b), the key aspects of this CSR dimension are the way the organization uses its assets and treats its waste, which is extended by Mandl & Dorr (2007) with bio-friendly use of materials and reusing resources. The study of European Bonus (2005b) finds a correlation between business notoriety and ecologically sound operation of SMEs in Denmark, and Viviers (2009) recognizes on South African data that

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SMEs with environmentally responsible operation are likely to gain competitive advantage, as clients prefer to associate themselves with eco-accommodating firms. This latter aspect is reinforced by Yazdanifard & Benevolence (2011) through highlighting the long-term dedication of such clients.

In light of the above narrative, the primary research of this paper pursues answering the following hypothesis:

H4: There is a positive relationship between the presence of environment-oriented CSR policy and the business performance of startups.

2.5.5. Regulated CSR Activities

Besides the voluntary participation in CSR, the national and regional regulators also aim to actively promote responsible business conduct. Compliance with such regulations can hardly serve as a benefit of competitive edge, for all companies are exposed to such measures and regulatory conditions tend to elevate the cost of operation. In spite of the non-voluntary exposure, the regulator imposes such directives to enhance the general level of service and to promote the well-being of the commonwealth, which should be beneficial for the complying parties.

Based on the above rationale, the paper words the following hypothesis:

H5: There is a positive relationship between the presence of regulated CSR policy and the business performance of startups.

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2.5.6. Comparison of Dutch and Hungarian CSR Conducts

Eventually, the paper aims to identify the differences in patterns between the Dutch and the Hungarian startups with regard to the business performance of their socially responsible conducts. The rationale behind this investigation is threefold. First, I am a Hungarian citizen, currently studying in the University of Amsterdam in the Netherlands. This fact has provided me with an insight to the cultural and economic differences between the two countries, which aroused my interest in the realized differences between the business practices of the two jurisdictions. Second, my unique setting has allowed me to make acquaintance with a number of small business owners / managers both in Hungary and in the Netherlands, which was rather insightful about the differences of ideas, future plans, attitudes, priorities and the perception of “normal” in business conduct. It spurs my curiosity to investigate the divergence of CSR patterns and their bottom line business relevance. Third, despite the differing character of the nations, they are both part of the European community of countries with entangling historic past, which fact may inject similar attitude towards such fundamental concepts as responsibility, society and business.

To identify a pattern in the web of similarities and differences, the investigation formulates the following (positively worded) hypothesis:

H6: There are no fundamental differences in the business performance impact of CSR activities between the Dutch and the Hungarian startups.

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3. Method

The section outlines the details of the primary research of the study. First, the rationale of the research approach is covered through providing the philosophical and strategical line of thinking behind the study. Second, the technical foundation of the research is covered by giving account about the fundamentals of the population and sampling, followed by the details of data collection methods. The chapter is concluded by revealing the statistical methods deployed to weigh the relationship between the tested markers of business success vis á vis the studied dimensions of corporate social responsibility.

3.1. Research Philosophy and Strategy

As per the summary of Holden & Lynch (2004) on Burell & Morgan (1979), the two main avenues of research philosophy are objectivism and subjectivism. While objectivism presumes the existence of an objective reality that is independent of the observer, subjectivism renders reality to be actively created by the human mind through interpreting the sensory information about the external world in the cultural, conscious and emotional framework. As the subject of business impact of corporate social responsibility is ultimately the function of the individual market players (potential business partners, clients and the society at large) and it cannot be purely an objective phenomena, these are strong arguments for the subjectivist approach. At the same time, the paper recognizes the merits of positivism, which assumes that quantitative techniques are applicable to advance the understanding of subjects rooted in a subjective reality (Abbot, 2010) With this recognition, the investigation deploys survey-type quantitative

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technique to amass quantifiable data on the subjective perception of leaders of startups on social responsibility dimensions.

3.2. Population and Sample

The research considers the European startup companies as population, represented by two independent samples, primarily different in terms of geography, economic performance and their modern day economic history. Leaders of a total of 609 Dutch and 300 Hungarian startups were approached through personal acquaintance (134 in the Netherlands and 105 in Hungary) or via e-mail (475 in the Netherlands and 195 in Hungary) in the timeframe between February 15 and March 12, 2016. The data collection relied on a uniform questionnaire through the services of an online survey agency. The process yielded a total of 230 respondents (117 in Hungary and 113 in the Netherlands) with 199 fully completed questionnaires (106 in Hungary and 93 in the Netherlands). The collected dataset turns out to be suitable for statistical assessment, for besides the Dutch / Hungarian subsets, the analysis did not aspire identifying further segments. Both the response rate and the questionnaire completion proved to be considerably higher among the personally contacted personages in the Netherlands (59.7% and 55.9%, respectively) than among those invited to participate though e-mail (6.9% and 3.8%, respectively). The situation was similar in Hungary: response rate (64.7%) and completion (61.9%) were much higher among the personally contacted startup leaders than among e-mail contacts (response rate: 25.1%; completion: 21.0%). Since the questionnaire did not aim to specify the respondents by detailed criteria and the data collection was anonymous, identification of high and low response subsets is not feasible. Although the collected sample did not aim to be representative of the population of

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the European startups, the geographically split sample advances meeting the criterion of reliability (Abbott, 2010), as amassing responses in two distinct jurisdictions elevates the potential of repeatability.

3.3. Details of Primary Data Analysis

The database was analyzed through descriptive and inferential statistical methods. The tools of investigation was a business tabulation program (Microsoft Excel 2016) and a statistical software package (IBM SPSS Statistics 22). Prior to and through the detailed investigation, the integrity of the database was ensured through a series of tests, methods and amendments. Although all SPSS codes were executed with the ‘list-wise’ inclusion condition, which guaranteed to include only the fully filled records in the procedures, records with missing country code and ones actively flagged as incomplete by the survey agency were deleted. Further, as the questionnaire had not validated data-type and range consistency in numeric manual input variables (namely: Q1 and Q3 through Q11) at entry, non-compliant data was recoded (or omitted if erroneous) post collection. During the execution of the regression analysis, the models were tested for heteroscedasticity of the residuals so as to learn if there were unwanted correlation between the independent variables. As such bias was identified in the dataset, four outlier records were omitted from the analysis. As Figure 3 and Figure 2 demonstrate, the erasure of the outliers resolved the heteroscedasticity issue in a statistical sense. However, there is an obvious visual pattern which the assessment needs to accept as intrinsic to the dataset.

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With the uniformity ensured, the data type of the variables were set to scale / ordinal numeric as appropriate. In preparation of testing, a number of calculated variables were created: (1) binary dummies to differentiate the Dutch and Hungarian respondents; (2) numeric variables to set the convoluted dependent elements of the planned regression models. Please refer to Appendix 7.1 for the list.

With regard to the descriptive and inferential statistical analysis, the Dutch and the Hungarian subsamples were analyzed using identical methods but independently. In terms of the statistical methods employed, the investigation used correlation analysis to detect the co-movement of the tested variables. Please refer to Appendix 7.2 and 7.3 for the correlation tables of the Hungarian and the Dutch sample, respectively.

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3.4. Measurement of Variables 3.4.1. Language Setting

Although this paper summarizes the learnings in English, the language of data collection was aligned with the respondents’ language proficiency. Due to the wide-spread use of English in the Netherlands, (Education First, 2011. cited by Dutch Daily News, 2013) the Dutch respondents landed in the English version of the questionnaire. With this approach, the records in the Dutch subset of the database was freed from potential translation challenges. Since the level of English proficiency is lower among Hungarians, they were invited to participate in the survey in their mother tongue.

3.4.2. Item coding

The questionnaire entails five distinct categories, each corresponding to a specific dimension of corporate social responsible policy. Each category contains multiple straight-coded items, measured on 7-point Likert scale. No recoding or transformation was necessary.

3.4.3. Workforce-Oriented CSR Policy

There are six items belonging to the corporate social responsible policies affecting the internal workforce of the startups: (1) workforce security, (2) training and career opportunity, (3) fair treatment of employees; (4) provision of sufficient wages; (5) consideration of work-life balance; and (6) equal employee opportunity and diversity. The reliability within the category is adequately high both in the Hungarian (Cronbach α = 0.945) and in the Dutch sample (Cronbach α = 0.928).

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3.4.4. Market-Oriented CSR Policy

Eight items tested the respondent’s company’s CSR attitude towards their clients: (1) customer safety and confidentiality; (2) honest customer policy; (3) customer complaint processing; (4) consumer rights respected beyond legal requirement; (5) long-term focus; (6) charging fair prices; (7) generating profit without cheating customers; (8) provision of useful information to customers. The reliabilities of the items within the CSR class are α = 0.972 (Hungary) and α = 0.934 (the Netherlands).

3.4.5. Community-Oriented CSR Policy

The questionnaire contained six items to detect the characteristic aspects of the community-related CSR policy of the startups: (1) aiming to improve community welfare; (2) participation in social and cultural events; (3) supporting education / sports / community activities; (4) helping the resolution of social issues; (5) sustainability for future generations; (6) devoting part of the budget to the disadvantaged. Although the integrity of the items in the Hungarian sample is slightly lower (α = 0.886) than among the Dutch respondents (α = 0.906), both sets surpass the reliability threshold.

3.4.6. Environment-Oriented CSR Policy

The investigation extended to detect eight features of corporate social responsibility with regard to the environment: (1) contained consumption of natural resources; (2) use of renewable energy; (3) recycling; (4) conducting annual environmental audit; (5) acquiring environmental certification; (6) expecting suppliers to meet environmental standards; (7) use of

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environmental-friendly packaging; (8) reducing waste. The Cronbach alpha of both jurisdictional subsets are high (α = 0.916 in Hungary and α = 0.927 in the Netherlands).

3.4.7. Regulated CSR Policy

The questionnaire asked the respondents to rate their recognition of legally bound social responsibility from three aspects: (1) fair payment of taxes; (2) compliance with legal regulation; (3) recognition of governmental CSR guidelines. The reliability in both samples are high with an α value of 0.861 in the Netherlands and 0.922 in Hungary.

3.5. Regression Models

The investigation entails regression analysis. For a thorough assessment and for the sake of objectivity in answering the hypotheses of the paper, a set of regression models were tested that involved specific combinations of dependent variables (i.e. measures of impact on business performance of the startups) and independent variables (i.e. different dimensions of socially responsible corporate policy). The tested set of models are summarized in Table 1.

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Table 1 - Tested regression models

Source: Own research

Model 1 through 5: These models aim to decipher the interrelation between the aspects of CSR policies and their business success. These models fundamentally correspond with the hypotheses of this paper. The expected direction of correspondence is positive for each model.

Model 6: The model aims to investigate if the internal, workforce related CSR policies have a positive effect on the number of employees. It is understood that the number of employees is a function of a complex set of conditions (including the business model, profitability and the industry) that fall beyond the scope of this paper, but responsible corporate behavior is

Dependent Variables Absolute Sales Growth in 2 years after CSR Difference Sales Growth Delta Employees Delta Sales- transactions Delta Clients In de pe nd ent var iab les

All CSR policies Model 1 Model 2 Model 3 Model 4 Model 5

Internal (workforce-oriented) CSR policies Model 6 Community-oriented CSR policies Model 7 Client-oriented CSR policies Model 8 Environment-oriented CSR policies Model 9 Regulation-oriented CSR policies Model 10

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potentially important for employee redemption and attracting applicants. Thus, the expected direction of relationship between the dependent and the independent variables is positive.

Model 7 and 9: The models aspire to reveal if the CSR policies implemented by the startups to demonstrate their embeddedness in their social (Model 7) and environmental (Model 9) setting is recognized by their peers, exerting a positive impact on their capability to attract clients.

Model 8: On a note similar to the previous regression models, this one targets to identify if the clients appreciate responsible corporate efforts. With Model 8, the paper investigates if the CSR policies directed at the clients have a measurable positive effect on the number of clients.

Model 10: It is recognized that corporations do not implement CSR policies merely on a voluntary basis, but the regulator also motivates them to act responsibly. Although the regulatory will can be in line with the firms’ interest, the lack of intrinsic intention may drive companies to perceive such directives as having undesired cost implications. Therefore, the expected direction of relation between the independent and the dependent variables is negative.

4. Results

4.1. Overall Business Performance

Comparing the means of the business performance indicators before and after the adoption of CSR policies reveals that the respondents broadly attribute positive evolution in the inquired

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period. As Table 2 reveals, the change was significantly positive in terms of the number of full time employees and the number of clients. With regard to the evolution of output of the startups measured as claimed sales and sales growth, the picture is less homogeneous. In the Hungarian sample, business performance indicator sales growth changed to the positive direction (+11.6 percentage points), while the number of sales transactions significantly declined (-73.26%). The Dutch sample shows an inverse pattern with considerable increase in the number of sales transaction (+20.53%) and a change in sale growth not exceeding the significance threshold.

Table 2 - Means of business performance indicators before and after adoption of CSR policy

Performance indicators _{CSR adoption}Before Two years after _{CSR adoption} Change Number of full time employees

Hungary 13.94 17.70 +26.97%

The Netherlands 11.82 13.46 +13.87%

Number of clients

Hungary 151.58 262.64 +73.26%

The Netherlands 128.63 180.72 +40.49%

Number of sales transactions

Hungary 3,673.66 2,795.78 -23.89%

The Netherlands 31,543.26 38,018.99 +20.53%

Sales growth

Hungary 11.5% 23.1% +11.6% pts.

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4.2. Corporate Social Responsibility Dimensions

The survey contained a total of 31 Likert-scale questions to learn the level of engagement of the sample in social responsibility. The questions were broken down to five dimension.

4.2.1. Internal Workforce Related CSR

As Figure 7 demonstrates, workforce related CSR policies average in the region of 3.79 – 4.22 in Hungary and 4.47 – 5.07 in the Netherlands on a seven-point scale. In Holland, the most important factors are the equal opportunity and diversity (5.07 / 7.00) and work-life balance of the employees (4.96 / 7.00), neither being in direct relation to profit generation. Among the Hungarian startups, the majority of the factors score in a very tight range, thus it would be statistically not justifiable to identify factors of particular importance. At the same time, workforce sustainability (training and career opportunity and workplace security, 3.79 / 7.00 and 3.98 / 7.00 respectively) seem to be a notch less important for the Hungarian employers than the rest of the factors.

Table 3 - Internal workforce-related CSR dimensions

CSR Dimension Hungary The Netherlands

Equal opportunity and diversity 4.19 5.07

Work-life balance 4.17 4.96

Sufficient wages 4.13 4.71

Fair treatment of employees 4.22 4.73

Training and career opportunity 3.79 4.68

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4.2.2. Market Related CSR

Gaining clients seems to be the dimension Hungarian startups are the most keen on among the tested CSR dimension. None of the client-related CSR items averages below 4.21 / 7.00 among the Hungarian respondents, although the answers are rather less differentiated, as the top score does not exceed 4.62 / 7.00, either. Apart from the slightly higher range of averages, the pattern is highly similar in the Netherlands: the items score in a tight range. The uniformity of the averages may suggest that the while clients are undoubtedly important for the startups, the perspective of corporate responsibility hardly permeates the organizations on a conscious and differentiated level.

Table 4 – Market-Related CSR dimensions

Customers are fed with useful information 4.47 4.86

Generating profit without cheating customers 4.51 5.02

Charging fair prices 4.33 5.03

Long-term focus 4.62 4.80

Customer rights are respected beyond legal requirements 4.31 4.93

Customer complaint processing 4.25 4.78

Honest customer policy 4.45 5.10

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4.2.3. Community Related CSR

There are considerable differences between the Dutch and the Hungarian subsamples. Among the Dutch respondents, the importance of social responsibility towards the community is uniformly important, as the scores scatter in a tight and relatively high range (4.85 – 5.04). However, the lack of differentiation hints on less than conscious CSR strategy towards the community. In Hungary, the startup leaders clearly distinguish their passive and active social sensitivity: those items that are vaguely defined and hardly tangible, thus suggesting passive participation, (sustainability for future generation and aiming to improve community welfare) score significantly higher (4.32 / 7.00 and 4.31 / 7.00, respectively) than the rest of the items that would call for active participation and dedication of corporate resources.

Table 5 – Community-Related CSR dimensions

Part of the budget is spent on the disadvantaged 3.70 4.86

Sustainability for future generation 4.32 5.04

Helping resolution of social issues 3.69 4.95

Supporting education / sports / community activities 3.79 4.94

Participation in social and cultural events 3.87 4.85

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4.2.4. Environment Related CSR

The question of environmentally responsible policies is rather similar to the startups’ relation to the community. In Hungary, those items tend to score relatively high (over 4.00 / 7.00) that allow the incorporation of environmental considerations to the normal operation of the firms and to their ability to generate income. Namely, waste reduction (4.19 / 7.00), the use of

environmental-friendly packaging materials (4.09 / 7.00), requesting suppliers to meet environmental standards

(4.09 / 7.00) and contained consumption of natural resources (4.03 / 7.00). At the same time, items that require participation in external programs and conducting extra procedures stay below 4.00. However, the distribution of averages is extremely tight, so the above demarcation of the pattern might be attributed to the observer psychological bias. In the Netherlands, the buzz word of corporate social responsibility in relation to environment seems to be reducing the ecological footprint, as waste reduction (5.02 / 7.00) and recycling (5.08 / 7.00) are separated from the rest of the items by scoring above 5.00 / 7.00.

Table 6 – Environment-Related CSR dimensions

Reducing waste 4.19 5.02

Use of environmental-friendly packaging 4.09 4.85

Suppliers to meet environmental standards 4.09 4.70

Participation in environmental certification 3.96 4.88

Conduction of annual environmental audit 3.88 4.84

Recycling 3.99 5.08

Use of renewable energy 3.95 4.83

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4.2.5. Regulation Related CSR

Although there are only three tested items in the legal dimension of corporate social responsibility, they are capable to depict a different picture for Hungary and the Netherlands. While it seems that startups in both jurisdictions are well in the know about the regulatory framework of CSR, it seems that it is more motivating for the Hungarian businesses to comply than for the Dutch startups. At the same time, the surveyed leaders of the companies in the Netherlands attach more importance to tax regulation than their Hungarian peers – a serious reality check.

Table 7 –Regulatory CSR dimensions

4.3. Correlation Analysis

The details of the correlations among the variables are demonstrated in Appendix 3.2 and 3.3. Based on the tables, it can be concluded that there are a number of correlations among the answers. In the Hungarian sample, the tested performance indicators predominantly positively correlate with the employed CSR policies, albeit the strength of correlation exceeds the p < .01 threshold on a limited set (Table 7). It is worth noting certain general patterns: the marker related CSR category have the most numerous items with strong (p < .01) correlation with business performance markers. Further, CSR policy items tend to correlate with the change in the number of sales transactions and the change in the number of employees the Hungarian startups can hire,

Recognition of governmental CSR guidelines 4.84 5.28

Compliance with legal regulation 4.73 4.90

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while the correlations are much fewer to uncover a relation between CSR dimensions and the number of clients as well as well realized sales growth. Finally, the direct budgetary outlay to help the disadvantaged repeatedly correlates with the facets of claimed business success in a negative fashion. Among the respondents in the Netherlands, the correlations between the calculated business performance variables and the CSR dimensions are considerably fewer and are predominantly negative. It is a worthwhile learning that the workforce oriented CSR items show only weak (p < 0.05) correlation, none of the variables steps over the (p < 0.01) threshold.

Table 8 –Correlation analysis – Hungarian Sample

Strongly correlating items (p < 0.01) Positive (r) Negative (r)

Delta employees

Workforce related CSR items

Fair treatment of employees .301

Sufficient wages .286

Work-life balance policy .314

Equal opportunity and diversity .255

Market related CSR items

Honest customer policy .315

Complaint processing .292

Respecting customer rights .341

Long-term focus .345

Charging fair prices .273

Not cheating customers .287

Community related CSR items

F i n a n c i a l l y h e l p i n g t h e

disadvantaged -.320

Regulatory CSR items

Fair payment of taxes .288

Compliance with regulation .269

Delta clients

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Delta sales transactions

Workforce related CSR items

Fair treatment of employees .403

Sufficient wages .254

Work-life balance policy .330

Equal opportunity and diversity .368

Market related CSR items

Customer safety and confidentiality .312

Honest customer policy .414

Long-term focus .370

Charging fair prices .412

Feeding useful information .381

Aiming to improve community welfare .331 Sustainability for future generations .400 F i n a n c i a l l y h e l p i n g t h e

Environment related CSR items

Use of renewable energy .308