| The purpose of this study was to examine the relationships between stakeholders' interests, corporate social responsibility (CSR) and financial performance of selected companies in Indonesia. During the period 1998–2002, ethical issues become critical aspects of business society there. The stakeholder approach was used with an emphasis on state-owned enterprises (SOEs). Some were privatized as the study continued, and therefore certain private and mixed ownership companies were included. The methodology was non-experimental, an explanatory survey, and multivariate correlations by using cross-sectioned data and critical path analysis. Three hypotheses were tested: (1) There are correlations amongst stakeholders' interests; (2) Stakeholders' interests affect significantly to social responsibility: and (3) The influence of social responsibility toward financial performance is significant. The sample includes 106 companies: 78 SOEs (Group 1), 19 private companies (Group 2), and nine mixed-ownership companies (Group 3). Data was assembled from 386 respondents to survey questionnaires. In the analysis, SPSS 10.0 and LISREL 8.50 computer software were used interchangeably. In testing the first hypothesis, all interests of stakeholders have a significant correlation with non-zero scores. The weakest correlation, reflected by a correlation coefficient, was 0.1981; and the strongest was 0.9816. In testing the second hypothesis, results split between two categories: one was three-negative correlation (−0.0898, −0.2039, and −0.1861); the other was three-positive correlation (0.2738. 0.2066, and 0.9835). However, this can be calculated that the total correlation was still positive. Testing the third hypothesis, the indication was that the correlation between social responsibility and financial performance was quite weak with a score of 0.0562. This was the first research of its kind in Indonesia and suggestions are made for future research. |
