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Sustainability Accounting, Management and Policy Journal Corporate sustainable business practices and talent attraction Mohamad Abu Huzaifah bin Magbool Azlan Amran Mehran Nejati Krishnaswamy Jayaraman

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To cite this document: Mohamad Abu Huzaifah bin Magbool Azlan Amran Mehran Nejati Krishnaswamy Jayaraman , (2016),"Corporate sustainable business practices and talent attraction", Sustainability Accounting, Management and Policy Journal, Vol. 7 Iss 4 pp. 539 - 559 Permanent link to this document: http://dx.doi.org/10.1108/SAMPJ-06-2015-0042 Downloaded on: 08 November 2016, At: 08:09 (PT) References: this document contains references to 64 other documents. To copy this document: [email protected] The fulltext of this document has been downloaded 49 times since 2016*

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Corporate sustainable business practices and talent attraction Mohamad Abu Huzaifah bin Magbool, Azlan Amran, Mehran Nejati and Krishnaswamy Jayaraman

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Graduate School of Business (GSB), Universiti Sains Malaysia (USM), Penang, Malaysia

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Abstract Purpose – This study aims to investigate whether organizations can leverage on their sustainable business practices to attract valuable talents to gain competitive advantage over their competitors. Design/methodology/approach – Using factorial design, the authors conducted an experiment to assess the attractiveness of an organization in line with the social identity theory, based on the Bursa Malaysia corporate social responsibility (CSR) framework attributes (including environmental performance, community relation, workplace and marketplace performance). Findings – The findings of the current study supported the notion of social identity theory, as study subjects were attracted more to organizations with high corporate sustainable business (CSB) practices than organizations with low CSB practices. Specifically, findings of the current study revealed that job applicants have a higher intention to join and willingness to accept a job offer from organizations with more sustainable business practices. Research limitations/implications – This study is limited by its sample size and selection, self-reported measures and its cross-sectional nature. Practical implications – Understanding the most preferred attribute of CSB practices will enable organizations to focus their valuable resources rightfully to market their CSR efforts for obtaining higher organizational attractiveness and competitive advantage. Social implications – As many organizations perceive sustainable outcomes to be costly, demonstrating the positive link between CSB practices and organizational attractiveness for talents warrants a win-win paradigm. Originality/value – Talented workforce is essential for differentiating an organization from its competitors. As human resources are mostly unique and non-imitable, it has been recommended as a newly minted strategy to enable organization to achieve sustainable competitive advantages. Keywords Human resource management, Corporate social responsibility, Business sustainability, Organizational attractiveness, Talent attraction, Corporate sustainable business practices Paper type Research paper

Introduction Globalization has posed a novel challenge for business survival. The rising global competitive environment has denied the success of the traditional business strategy (Bartlett and Ghoshal, 2002), and mere low cost and differentiation strategy are not sufficient to outlast the stiff competition. Hence, there are growing beliefs that global survival requires a unique competitive advantage which is highly difficult to be emulated. Khandekar and Sharma (2005) argued that developing vital mass of workforces who are skilled or knowledgeable in a particular field may constitute a possible source of competitive advantage. Sustainable competitive advantage as

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advocated by O’Shannassy (2008) has been closely attributed to an organization’s talents, which is considered as a unique feature. However, there is a war being waged as organizations, and countries struggle to hold their talents within their borders while trying to attract the world’s brightest (Wen, 2012). Accordingly to Lis (2012), one of the key challenges of human resource management currently is the apparent scarcity of highly skilled and motivated employees. “War for Talent”, a term coined by research power house McKinsey & Company in 1997, is still ongoing strongly and has been detrimental to competitiveness of many organizations and countries. Human capital is the foundation of high-income economy. Traditional approach of luring talents via attractive salary packages and fringe benefits has not been conclusively able to attract the best talents in the current human resource climate (Wen, 2012). In Fortune (2011) magazine’s “100 Best Companies to Work For” survey, not a single person cited money as a motive of why they loved the place they worked for. Hence, the vital question to be asked is “What is the world’s best looking for?” To shed more light on this question, the current study aims to investigate the relationship between corporate sustainable business (CSB) practices and organizational attractiveness from the perspective of talents. This is achieved through factorial design with two levels and examining survey data collected from 66 respondents. Although the small number of observations inherently limits the generalizability of our research, it is not uncommon for studies with experimental designs to have a small number of observations (Bujisic et al., 2014; Rompho, 2012). As organizations face mounting pressure to more efficiently and effectively utilize their resources, it is also paramount to identify the optimum strategy of investment in sustainability dimensions to maximize the positive impact on future employees. This allows an organization to strategically embark on business sustainability to create an effective tool for attracting potential employees and become an employer-of-choice. Therefore, the current study identifies the most preferred attributes out of the four types of CSB practices, environmental performance, community relation, workplace practices and market practices, as rated by prospective employees. Besides, the effects of gender and age towards the interaction between the CSB practices and organizational attractiveness are investigated. As attracting future talents has been a priority for the survival of business organizations, elucidating the link between CSB practices and organizational attractiveness and identifying the preferred CSB practices from the perspective of future employees could help to better utilize the organizational resources to gain competitive advantage over competitors through attracting and retaining future talents. This study was carried out in the context of Malaysia, which is a rapidly growing developing country. As Malaysia aspires to transform itself to a high-income nation by the year 2020, the human capital development has taken the centre stage in its transformation agenda. However, it is estimated that as of 2010, almost a million of Malaysians work and live outside Malaysia and one-third of them represent brain drain (World Bank, 2011). Brain drain refers to those Malaysians who were educated up to tertiary level and represent valuable skills which are now no longer available to contribute to Malaysia’s economic development (National Economic Advisory Council, 2010). As such, this is a timely study which offers a better understanding for corporations on what sustainability business practices are valued most by future talents, paving the way for their greater competitive advantage through attracting talents.

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The contributions of this study are three-fold. First, this study inquires whether CSB practices impact organizational attractiveness for talents. Second, it investigates and identifies the optimum combination of CSB dimension to maximize organizational attractiveness. Third, it investigates differences in perceived organizational attractiveness based on demographic differences of future employees (i.e. gender and age). This paper is a response to calls for increased research on how corporate social responsibility (CSR) affects individuals (Evans and Davis, 2011) and extends the earlier studies which investigate whether CSR can be an important predictor of job choices. Apart from offering insights from a relatively unexplored context (i.e. Malaysia), this paper examines how CSB practices matter in job applicants’ intention to join and willingness to accept a job offer from an organization. Moreover, our research extends the work of Duarte et al. (2014) by incorporating willingness to accept a job offer in the study. Research framework and hypothesis development Mckinsey’s study on 6,000 managers prevailed that talent will be one of the most important corporate resources in the next 20 years (Baharin and Abdullah, 2011). It is talent that promotes productivity, innovation and creativity, which in turn will ensure a sustainable business (Baharin and Abdullah, 2011). Attracting and recruiting workers with the skills related to the core competencies of the organization are the utmost concern to organizational leaders (Bartlett and Ghoshal, 2002). About 90 per cent of almost 7,000 managers surveyed indicated that talent acquisition and retention were becoming more difficult, and a survey of 33,000 employers from 23 countries found that 40 per cent of them had difficulty in finding and hiring the desired talent (Ployhart, 2006). Recruitment deals with an organization’s efforts to identify, attract and influence job applicants. Research carried out by Business in the Community (2003) in partnership with the Chartered Institute of Personnel Development (CIPD) and the Future Work Institute suggests that responsible business practices help to attract, motivate and retain a diverse and talented workforce. A survey which was commissioned by the Global Reporting Initiative and conducted by Futerra Sustainability Communications, Sustainability Ltd. and KPMG in 2010 showed that prospective employees are turning to sustainability reports to decide whether to work for a company (Global Reporting Initiative, 2010). Bhattacharya et al. (2008) have elaborated that with a planned approach, organizations can increase the effectiveness of CSR effectiveness as a lever for talent management. CSR has been the subject of enormous discussion and intense debate over the past several decades (Jamali, 2008; Quazi et al., 2015; Quazi and O’Brien, 2000). The research by Greening and Turban (2000) which focused specifically on few corporate social variables suggested that firms may develop competitive advantages by being perceived as attractive places of employment because of their performance with regards to quality of products and services, treatment of women and the environment and issues of diversity. However, findings regarding the impacts of business sustainability practices are inconclusive. The study by Guidry and Patten (2010) on US firms did not find any significant market reaction to the announcement of the release of sustainability reports. To develop a theoretical framework for this study, two main theories, namely, social identity theory and signalling theory, have been applied which explain the determinants

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of organizational attractiveness and postulate the link between sustainable development (SD) and competitive advantage. Tajfel and Turner (1979) indicated the crucial role of groups people belonged to in creating a sense of pride, self-esteem and social identity for them. The social identity theory explains that a person’s self-concept is subjective to membership in different social organizations (Greening and Turban, 2000) and a portion of one’s self-concept depends on the perceived importance and relevance of individual’s membership in a group (Turner and Oakes, 1986). It denotes that people depend on their belonging to a certain social group, and that such relationships have a favourable assessment (Hogg and Terry, 2000). In other words, individuals tend to define their identity by affiliating themselves to a group and by comparing themselves to a lower quality group to enhance their self-esteem (de Run et al., 2010). The affiliation is inclusive of the organization which the individual works for (Ashforth and Mael, 1989). Greening and Turban (2000) suggested that a firm’s reputation and image are partly influenced by knowledge of the firm’s action regarding social and political issues and their associated stakeholders. The actions of the firms are seen to portray the image of the workers. The workers will enjoy the benefits of employer’s positive reputation and also suffer from the unfavourable effects of the firm’s negative reputation (Dutton et al., 1994). Sustainable business practices are seen to boost the image of an organization. Thus, Greening and Turban (2000) suggested that sustainable business practices will positively affect the attractiveness of an organization as a potential employer. A prospective employee will establish a positive perception of what it would be like to work for a firm given its encouraging image. Sohn et al. (2015) showed that corporate social performance profiles of companies influence their attractiveness for job seekers. They found that majority of talent acquires information about corporate social performance in the pre-decision phase of the judgment prior to making an employment decision. Moreover, Tsai et al. (2016) discovered that business practice CSR engagement has a positive effect on firm’s attractiveness, which in turn improves job offer acceptance of professional job applicants. Also, findings of the study by Duarte et al. (2014) prove that a company’s level of engagement in socially responsible practices positively affects participants’ perception of the organization and their intention to apply for a job vacancy in the company. In contrast to these findings, a study of 238 senior undergraduates at an Australian metropolitan university showed that although majority of respondents considered CSR as an important factor in their job choices, a larger majority were willing to trade this off for greater extrinsic benefits (Leveson and Joiner, 2014). In establishing the perception of prospective employees towards an organization, de Run et al. (2010) suggested that because of limitation of accurate and complete information available about an organization, job seekers tend to base their decisions on whatever characteristics prevail about the organization. The conclusion drawn by the job seekers in this manner is explainable by the signalling theory. According to the signalling theory, individuals draw conclusions of an organization’s purpose or performance by means of the clues it promotes. Hence, an organization can consciously choose information that it wants to send out to its prospective employees to draw their attention. For example, an organization with ISO14001 certification may send a signal to its potential applicants that the organization gives due attention to environmental advocacy. Thus, it is conjectured that an organization’s sustainable business practices

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will send positive signals to its prospective employees, hence increasing the organizational attractiveness. Bratton and Gold (2003) defined attraction as the “favourable interaction between potential applicants and the images, values, and information about an organization”. Highhouse et al. (2003) elaborated attraction as a reflection in individual’s attitudinal thoughts about particular firm as potential place for employment. As quoted by Ehrhart and Ziegert (2005), according to Soelberg’s (1967), choice of a job or organization is an “non-programmed” decision process. Individuals define a set of acceptable criteria on the basis of their ideal work environment. These criteria would cover whatever qualities are deemed personally relevant and important. In assessing the attractiveness of a firm, individuals process information about the organization’s environment or image and choose an implicit favourite job among the alternatives available (Ehrhart and Ziegert, 2005). Initial attraction of an applicant is influenced by the perceptions of the firm’s image, and the more favourable the organization image, the higher would be the likelihood of applying for the job by the potential applicants (Belt and Paolillo, 1982). The positive signals emitted by the organization as explained in the signalling theory could be a beacon in luring attention towards the organization. Wright et al. (1995) indicated that positive reputation or image of an organization is more successful in attracting high-quality applicants. Organizational image is referred to the general impressions held by those outside the organization (Klaus Moser and Barber, 1998), and the images are constructed from wide range of activities carried out by the organization (de Run et al., 2010). Various operationalizations (e.g. image, reputation, brand and symbolic attributes) have been used to examine employer image, but all argue that image has important effects on recruitment outcomes (Ployhart, 2006). For example, Turban and Cable (2003) demonstrated how the image of an organization operationalised as the organization’s ranking in famous business publications (e.g. Fortune and Business Week) had an effect on its attractiveness. The organizations with high rankings have increased number of applicants. Greening and Turban (2000) argued that the logic behind the link between CSR and organizational attractiveness is that an organization’s commitment to CSR reflects positively on the organization’s reputation and image. Supporting this, numerous researches has been done examining how organization’s devotion to CSR has become another main factor in attracting a quality workforce. The results from these studies confirm that prospective job applicants find organizations that are socially responsible to be more attractive than organizations assigning less attention to social responsibility (Bhattacharya et al., 2008; Business in the Community, 2003; de Run et al., 2010; Greening and Turban, 2000). This is crucial, as millennials have been shown to have a higher commitment to CSR (Kaifi et al., 2014), and young workers are particularly influenced by symbolic attributes of an organization’s brand image (Myrden and Kelloway, 2015). Findings of a research sponsored by the British United Provident Association and conducted by Business in the Community (2003) with the CIPD amongst 1,000 British workers aged 25-65 years prevailed that responsible business practices helped to attract and retain talented and diverse workforce. According to another study conducted by Students for Responsible Business, more than half of the 2,100 MBA students who responded to the study were willing to forgo financial benefits

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(i.e. they would accept a lower salary) to work for an organization that is socially responsible (Albinger and Freeman, 2000). Ramasamy et al. (2008) conducted a research among graduating students in China and Taiwan to establish the role of CSR (CSR) in job choice decisions. The survey was done to examine the extent to which CSR issues – namely, working conditions, ethical policy and community outreach initiatives – could influence job choices compared to typical job attributes such as salary, location, job prospects and type of companies. The results proved that CSR influences decision among job seekers.

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Sustainable development and competitive advantage A current competitive business climate proves that organizations pursuing to attain competitive advantage by the traditional approach have been doomed. According to various scholars, combating these challenges and gaining competitive advantages can be flawlessly done by CSR (Carroll and Shabana, 2010; Kurucz et al., 2008). Active engagement in SD is not only regarded as a way to differentiate business from competitors but, moreover, increases organization’s market values. In addition, it tenders a way to increase business’s bottom line by enhancing customer loyalty. The proposed framework constructs are depicted in Figure 1. This theoretical framework explains the relationship between corporate sustainability business practices (environment, community, workplace and marketplace) and organizational attractiveness. The choice of these variables for the study is strongly supported by the fact that prospective employees are referring to SD reports in deciding whether to work for an organization (Global Reporting Initiative, 2010). Furthermore, these variables are underlined in Bursa Malaysia Berhad (2010) CSR framework as an SD reporting guideline for public-listed companies in Malaysia. Independent Variables

Dependent Variable

Environment High environment performance (E1) Low environment performance (E2)

Community Strong community relations (C1) Weak community relations (C2)

Workplace Good workplace practices (W1) Bad workplace practices (W2)

Figure 1. Research framework

Marketplace Good marketplace practices (M1) Bad marketplace practices (M2)

Organizational attractiveness - Intention to join - Accepting job offer

The framework demonstrates how each of the four variables influences organization’s attractiveness, which is measured by the intention to join the organization and accept the job offer. Each of the independent variables is manipulated by high and low performance to study its effect towards organizational attractiveness. Both the social identity theory and signalling theory suggest that high CSB practices will influence the job preference of a job seeker, because such organizations will signal more positive working conditions than organizations with low CSB practices. Specifically, we hypothesize that job seekers will be attracted to organizations with high CSB practices than those with low CSB practices:

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H1. Professionals have greater intention to join organizations with high CSB practices performance. H2. Professionals demonstrate higher willingness to accept job offer from organizations with high CSB practices performance. Based on the various findings in the existing literature, it is expected that individual differences will portray differences in the perceived level of organizational attractiveness among respondents. Women have been reported to be more CSR conscious than men by various researchers (de Run et al., 2010; Greening and Turban, 2000; Smith et al., 2004). This is mainly supported by the reason that some of the CSR attributes include the treatment of woman and minorities, which is in the interest of females specifically. Moreover, Business in the Community (2003) reported that for younger people, mainly those starting on the career, the main concern in choosing an employer would be the financial return and flexible opportunities for career progression. They recognise responsible business practices as only differentiating but not as a decisive factor. As individuals get older, a responsible practice is seen as more important and the financial reward is seen as less important in attracting talents. These assumptions were investigated in the current study by investigating the differences in perceived organizational attractiveness based on demographic factors (i.e. gender and age).

Method This study is an exploratory research carried out to comprehend the nature of the problem. Experimental designs with stimulated settings have been carried out for the analyses. To examine the cause and effect relationships among the variables, certain manipulations of the variables were performed. Factorial design enables testing of the effects of two or more manipulations at the same time on the dependent variable (Sekaran, 2008). For the purpose of this study, the manipulation created for the independent variable (environmental, community, workplace and marketplace) was high and low. Factorial design, namely, 24 experiments, was used for the analyses. From this design, 16 combination cases were derived (Appendix). According to Podsakoff and Organ (1986), common method variance (CMV) becomes problematic where a single latent factor might account for the majority of the explained variance. Two major causes of common method bias include the common rater effect and social desirability (Podsakoff et al., 2003). As this study used a single respondent source to generate the data, we checked for CMV using construct correlation matrix. CMV is usually evidenced by inter-construct correlations larger than 0.90

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(Bagozzi et al., 1991), which was not the case in the current study. Hence, we ruled out the threat of common method bias. Questionnaire design The questionnaire has been designed to assess the attractiveness of a hypothetical organization which has been simulated using combination of four independent variables. This study used factorial design with two levels (high and low) and four factors (environment, community, workplace and marketplace). Overall, 16 combination cases representing 16 hypothetical organizations were created. Respondents were expected to rate the attractiveness of each case organization based on their intention to join and willingness to accept the job offer. The descriptions of each of the 16 cases representing hypothetical organizations were created based on a concept of SD practices within the Malaysia’s environment. The four dimensions for the CSB practices, namely, environment, community, workplace and marketplace, were derived from the Bursa Malaysia CSR framework. As substantiated by the previous findings that prospective employees turn to SD report to decide whether to work for an organization, the descriptions for the discrete high and low levels of the performance for the CSB dimensions were derived from the award-winning SD reports. The ACCA Malaysia Environmental and Social Reporting Awards, which is one of the earliest and most reputable awards in Malaysia, was chosen for this purpose. Award-winning reports of local companies for the year 2011, such as UEM Environment, Telekom Malaysia, Maybank and Puncak Niaga, were referred. Table I shows the summary of the variables and their key indicators for high and low. The complete description for each variable is given in the final questionnaire in the Appendix. The 16 cases of manipulation of the independent variables were assessed by the respondents using a five-point Likert scale. This research used two items for measuring organizational attractiveness as given below: (1) Intention to join: I would be interested in pursuing a job application in a company with high performance in the CSB dimensions. (2) Accepting job offer: I would accept a job offer of a company with high performance in the CSB dimensions. Sample selection Most of the earlier research studies (de Run et al., 2010; Greening and Turban, 2000; Ramasamy et al., 2008; Smith et al., 2004) have used student as their respondents. Despite students being a good sample for job seekers, their views pose a series of limitation for generalizability of the findings. Students are primarily first-time job seekers. Factors such as salary and career progression opportunity have been proven to be their high priority (Business in the Community, 2003). Thus, manipulation of salary or career progression opportunity versus CSB practices could lead to distorted views. Additionally, with no or limited work experience, students’ view would have been solely based on their theoretical view of CSB practices. More importantly, because of their limited experiences and lack of valuable skills, graduates do not necessarily represent talents. Talented workers are the bedrock for success of an organization, as they carry valuable specific competencies which could provide competitive advantage for that organization. Thus, based on these arguments, the current study considered MBA

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SD dimensions

High

Low

Reference

Environmental performance

Key indicators Environmental certification Pollution reductions Energy savings

UEM Environment (2010), Puncak Niaga Holdings (2010)

Community relation

Key indicators Active community engagement Encourage employee volunteerism Runs charitable organizations Key indicators Committed promoting workplace diversity Empowers woman Provides safe and safe workplace Key indicators Committed in fighting malpractice Supports local supplier Strong customer relationship

Key indicators No environmental certification Ad hoc decisions making Pollution record Key indicators Weak community engagement Minimum philanthropic effort Not a good corporate citizen Key indicators Ethnically skewed workforce Haphazard workplace Minimum engagements with workers Key indicators No clear procurement guideline Ruckus relationships with suppliers Customers are seldom entertained

Workplace practices

Market practices

Telekom Malaysia (2010)

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Telekom Malaysia (2010), Maybank (2010)

Telekom Malaysia (2010)

graduates with at least two years of working experience as a proxy to measure talents and targeted this group to ensure a better generalizability of the findings. According to Ceja and Ta`pies (2009), MBA students are highly talented potential employees who can be a source of competitive advantage for organizations. This selection to represent talents is also consistent with a number of earlier studies which consider graduates as the talent (Buckingham and Vosburgh, 2001; Chen et al., 2004; Jameson and Holden, 2000; Raybould and Sheedy, 2005). The population frame used was the alumni record for MBA graduates from four universities, namely, Universiti Sains Malaysia, Universiti Malaya, Universiti Kebangsaan Malaysia and Universiti Putra Malaysia. Using non-probability sampling method, members of the population who were conveniently available were sampled for this study. The data were collected primarily online, and a total of 1,159 e-mails were sent out to MBA graduates from four business schools in Malaysia. A total of 66 responses which represent 6.6 per cent response rate were received. These responses were collected via various means. Overall, 24 responses (35.3 per cent) were received via e-mail in word or excel format questionnaires, and the other 44 responses (64.7 per cent) were received online through Google docs forms. Control variables In an experimental design analysis, we must ensure that only the interested independent variables (IVs) cause the change in the dependent variable (Sekaran, 2008). Thus, to

Table I. Summary of the key indicators of sustainable development (SD) dimensions

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establish the causal relationships between the two variables in an organizational setting, several variables that might co-vary with the dependent variable have to be controlled. This would then allow concluding that the interested independent variable alone caused the dependent variable. In this regards, for this study, the organizational attractiveness could be caused by not only CSB practices but also by various other factors such as salary, career progression opportunity, revenue of the organization and type of industry. Greening and Turban (2000) identified the limitation for not being able to clarify some of these controls. Hence, this study took serious consideration in controlling some of the key other variables to ensure that only CSB practices been considered by the respondents to establish its effects on organizational attractiveness. Data analysis Minitab factorial design analysis was used to establish the relationships between the independent variables and the dependent variable. The analysis could verify the significance of the main interactions, i.e. IVs individually to the DV and two-way, three-way and four-way interactions (two, three or four IV interactions to the DV). Two-level factorial design which represents the two discrete levels (high and low) for the IVs and four factors representing four IVs (environment, community, workplace and marketplace) was applied. Conjoint analysis was used to measure the perceived values of the specific product features. For the purpose of understanding the preferred manipulated cases out of the 16, multidimensional scaling (MDS) analysis in SPSS was performed to analyse the significant similarity and dissimilarity of the 16 cases. The most dissimilar cases in the MDS map signify the most preferred case. Findings Demographic profile of the respondents Out of the 66 respondents, 27 were male, representing 40.9 per cent of the sample, and 39 were female (59.1 per cent). Majority of the respondents (i.e. 53 per cent) were aged between 31 and 40 years, 25.8 per cent were aged between 21 and 30 years and the remaining 21.2 per cent were aged between 41 and 50 years. Moreover, 90.9 per cent of the respondents were currently employed, and the remaining 9.1 per cent were unemployed. Factorial design analysis – main effects Respondents were requested to classify their job positions as executive, managerial or senior management. Because of the low number of respondents for the senior management group compounded by the fact that senior management can also be considered as part of managerial team, the categories of managerial and senior management were merged into one category. Final responses were recorded into these two categories with score 1 representing executive and score 2 representing managerial. Then, the factorial design analysis of two replicate (executive and management) and two blocks (intention to join and accepting job offer) was carried out. Intention to join. The output revealed that main effect (F ⫽ 187.74, p ⬍ 0.001), two-way interactions (F ⫽ 7.05, p ⫽ 0.001) and three-way interactions (F ⫽ 5.13, p ⫽ 0.008) were significant. However, the four-way interactions (F ⫽ 3.24, p ⫽ 0.092) were found to be insignificant (Table II). From the main effect, all the IVs [environmental performance (T ⫽ 10.51, p ⬍ 0.001), community relations (T ⫽ 10.07, p ⬍ 0.001), workplace (T ⫽ 19.07, p ⬍ 0.001) and marketplace practices (T ⫽ 13.24, p ⬍ 0.001)] were

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found to be significant. Moreover, Table III signifies that the respondents reported stronger intention to join organizations with high environmental, community, workplace and marketplace performance. The result substantiates the H1 and confirms that all of the four dimensions of CSB practices, namely, high environmental performance, strong community relations, good workplace and marketplace practices, positively influence the respondent’s intention to join an organization. The factorial design analysis elucidated an interesting outcome for the most preferred CSB practice attributes. Figure 2 shows that out of the four CSB practices attributes, workplace has been rated highly. This demonstrates the undue attention given to workplace practices by the job seekers towards a prospective employer. Accepting job offer. The output revealed that the main effect (F ⫽ 722.84, p ⬍ 0.001), two-way interactions (F ⫽ 20.37, p ⬍ 0.001), three-way interactions (F ⫽ 8.13, p ⫽ 0.001) and four-way interactions (F ⫽ 7.07, p ⫽ 0.018) were all significant (Table IV). For the main effects, all of the IVs [environmental performance (T ⫽ 24.40, p ⬍ 0.001), community relations (T ⫽ 19.76, p ⬍ 0.001), workplace (T ⫽ 36.84, p ⬍ 0.001) and marketplace practices (T ⫽ 23.41, p ⬍ 0.001)] were found to be significant (Table V). This signifies that respondents reported higher willingness to accept job offer from organizations with high environmental, community, workplace and marketplace performance. The results supported H2 and confirmed that all of the four dimensions of CSB practices, namely, high environmental performance, strong community relations, good workplace practices and good marketplace practices, positively influence respondents job offer acceptance.

Source

df

SS

MSS

F

p

Main effects Two-way interactions Three-way interactions Four-way interactions Residual error Total

4 6 4 1 15 31

16.9324 0.9535 0.4625 0.0731 0.3382 18.9758

4.23311 0.15891 0.11562 0.07314 0.02255

187.74 7.05 5.13 3.24

0.000** 0.001** 0.008** 0.092

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Table II. ANOVA for intention (coded units)

Note: ** Significant (P ⬍ 0.01)

Term

Coefficient

t-value

p-value

Constant Block Environment Community Workplace Marketplace

2.62384 ⫺0.08218 0.27911 0.26718 0.50632 0.35141

98.85 ⫺3.10 10.51 10.07 19.07 13.24

0.000** 0.007** 0.000** 0.000** 0.000** 0.000**

Note: ** Significant (P ⬍ 0.01)

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Table III. Factorial fit between intention versus block, environment, community, workplace and marketplace: estimates of coefficients for intention (coded units)

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Pareto Chart of the Standardized Effects (response is Intention, Alpha = 0.05)

2.13 C D A

550

B

F actor A B C D

N ame E nv ironment C ommunity Workplace M arketplace

F actor A B C D

N ame E nv ironment C ommunity Workplace M arketplace

AC

Term

A BC CD BD BCD AB AD BC A BD A CD

0

5

10 Standardized Effect

15

20

Pareto Chart of the Standardized Effects (response is Accepting, Alpha = 0.05)

2.13 C A D B CD AC

Term

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A BCD

BCD BD AB A BC AD A BCD BC A BD

Figure 2. Pareto chart for intention to join and accepting job offer

Table IV. ANOVA for accepting (coded units)

A CD

0

10

20 Standardized Effect

30

40

Source

df

SS

MSS

F

P

Main effects Two-way interactions Three-way interactions Four-way interactions Residual error Total

4 6 4 1 15 31

18.3942 0.7775 0.2068 0.0450 0.0954 19.5652

4.59855 0.12959 0.05171 0.04496 0.00636

722.84 20.37 8.13 7.07

0.000** 0.000** 0.001** 0.018*

Notes: ** Significant (P ⬍ 0.01); * significant (P ⬍ 0.05)

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Preferred combination of the four sustainable development dimensions Respondents were expected to rate their intention to join and willingness to accept the job offer of an organization for each combination case based on the five-point scale ranging from strongly disagree (coded as 1) to strongly agree (coded as 5). The middle point was labelled as neutral (coded as 3). Preferred combinations were derived from the cases which had scores more than 3 (more than the neutral point) to indicate that the respondents were attracted to the organization. These preferred combinations are presented in Tables VI and Table VII, sorting from the most to the least attractive. For both intention to join and accepting job offer, four preferred combinations were identified (Cases 14, 4, 9 and 16). Case 14, which represented high for all of the four factors of environmental, community, workplace and marketplace, scored the highest mean for both intention to join and accepting job offer. These results substantiate again H1 and H2, supporting the notion that an organization with high CSB practices will be perceived as more attractive to talents compared to an organization with low CSB practices. Another interesting observation is the degree of importance given to the workplace practices by respondents. All the preferred cases consisted of high workplace practice. Specifically, although cases with only three high attributes were preferred, only Case 3, which manifested a low level of workplace practices, was not preferred by respondents. This signals the importance of workplace practices in the eyes of talents and future employees.

Term

Coefficient

t-value

p-value

Constant Block Environment Community Workplace Marketplace

2.69347 ⫺0.03802 0.34411 0.27858 0.51950 0.33004

191.03 ⫺2.70 24.40 19.76 36.84 23.41

0.000** 0.017* 0.000** 0.000** 0.000** 0.000**

Notes: ** Significant (P ⬍ 0.01); * significant (P ⬍ 0.05)

Case

Environmental performance

Community relations

Workplace practices

Marketplace practices

14 9 4 16

High Low High High

High High Low High

High High High High

High High High Low

Case

Environmental performance

Community relations

Workplace practices

Marketplace practices

14 4 9 16

High High Low High

High Low High High

High High High High

High High High Low

Intention to join (mean) 4.64 3.35 3.32 3.24

Accepting job OFFER (mean) 4.68 3.52 3.42 3.39

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Table V. Factorial fit: accepting versus block, environment, community, workplace and marketplace: estimates of coefficients for accepting (coded units)

Table VI. Preferred combinations based on average score from 16 combination cases – intention to join

Table VII. Preferred combinations based on average score from 16 combination cases – accepting job offer

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Figure 3. MDS map for 16 combination cases – intention to join

Multidimensional scaling for 16 combination cases MDS analysis was conducted to investigate the degree of similarity and dissimilarity for each of the 16 combination cases in the research. In the MDS map (Euclidean distance model), similarity can be translated by the distance between two points in the map. Two cases were viewed relatively similar if the distance was short between the points, whereas if the two points were far away from each other, then the two cases were considered dissimilar by the respondents. Generally, the most preferred combination case should be located the furthest from all the other cases which were relatively clustered together. The MDS (ALSCAL) analysis was carried out for both intention to join and accepting job offer for all the 16 combination cases. MDS maps (Euclidean distance model) generated from the analyses are shown in Figures 3 and 4. In Figure 3, two main clusters were formed, whereby Cases 2, 3, 5, 7, 8, 10, 11 and 15 formed the first cluster, and Cases 1, 6, 12 and 13 formed the second cluster. Cases 14 and 4 were located relatively far away from the both clusters. Moreover, Cases 9 and 16 were overlapped. This demonstrates that these four combination cases are viewed differently by the respondents. Between the four cases, Case 14 is located the furthest from all the other cases, and this again demonstrates that Case 14 is the most preferred combination case. These findings correspond with the findings outlined earlier. In Figure 4, Cases 14, 4, 9 and 16 were located discretely from the rest of the cases. MDS map findings for both intention to join and accepting job offer concur with the earlier findings which indicated the preferred combination cases. Stress value for both the cases were small (⬍0.1) and the RSQ was above 60 per cent, indicating the good model fitness of the data for MDS analysis.

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Figure 4. MDS map for 16 combination cases – accepting job offer

Demographic differences in perceived organizational attractiveness We examined the differences in perception of respondents towards intention to join and willingness to accept a job offer of the hypothetical case organization based on respondents’ demographic differences, namely, gender and age. We performed independent-samples t-test for mean differences between male and female respondents, whereas one-way ANOVA with Tukey post hoc test were used to investigate differences based on respondents’ age category, 21-30, 31-40 and 41-50 years. Results of the analysis revealed significant differences among male and female respondents in several scenarios. In all these significantly different cases, male respondents demonstrated a higher intention to join (Cases 2 and 3) and a higher willingness to accept a job offer (Cases 2, 3, 5, 7 and 8). Additionally, significant differences were observed in intention to join (Cases 2, 3, 6, 7 and 8) and willingness to accept a job offer (Cases 2 and 3) based on respondents’ age. Specifically, the oldest group (41-50 years) had the least intention to join and least willingness to accept a job offer in the cases indicated. Discussion and conclusion Talented workforce spells the success for a business organization and is crucial for differentiating an organization from its competitors (Bhattacharya et al., 2008). A new school of thought has strongly advocated that being socially responsible could be the secret weapon in winning the war for talents. The current study investigated whether CSB practices of an organization aids in attracting talented professionals to provide organizations such an advantage. The findings of this study supported the notion that organizations with high CSB practices are perceived to be more attractive than

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organizations with lower CSB practices, and that job applicants’ intention to join and accept a job offer are positively associated with an organization’s CSB practices. Overall, both H1 and H2 were supported. Consistent with previous research (Albinger and Freeman, 2000; Greening and Turban, 2000), the results indicate that organizations demonstrating higher levels of CSB practices have an increased ability to attract employees, yielding a competitive advantage for the organization. The findings of this study are supported by the signalling theory, which indicates that organizations can consciously signal to the prospective employees certain information, which could in return create a positive perception of the organization’s values for prospective employees. According to the signalling theory, job seekers tend to draw conclusion about an organization based on information that is available to them. In Malaysia, particularly, job advertisement often contains information about workplace more than any other CSB attributes. Thus, as the signalling theory suggests, information that is sent by the organization shapes the perceived image of the organization, leading to influence its attractiveness. Study findings are also consistent with the notion of Brokaw (2013), who indicates that sustainability and CSR make recruiting and retaining people easier. Other than enhancing the organizational attractiveness and its likelihood in attracting talents, social responsibility and sustainability practices have been shown to enhance the employees’ organizational commitment (Shen and Jiuhua Zhu, 2011; Tilleman, 2012), and the contribution of CSR to organizational commitment has been found to be as great as job satisfaction (Brammer et al., 2007). Hence, given the numerous proven advantages of CSR and sustainability practices, more organizations are expected to strategically embed CSR and CSB in their mission and operations. Job choices are not determined based on isolated attributes. Job selection involves trade-offs (Gatewood et al., 1993), which are determined by the attributes that the prospective employees are willing to let go in return for others. Results of this study indicated that out of the 16 scenarios investigated, four cases (i.e. four hypothetical organizations) were preferred by respondents, namely, Cases 14, 9, 4 and 16, which portrayed organizations with high levels of CSB in all or three of the major SD areas; Case 14 portrayed an organization which has high performance for all of the four SD dimensions, whereas Cases 9, 4 and 16 have three out of four high SD dimensions performance. This implied that respondents are willing to trade-off at least one of the dimensions. For example, if an organization has a good track record of environment, community relations and workplace but has performed poorly in marketplace practices, the respondents will still perceive the organization as an attractive workplace and show strong intention to join and high willingness to accept the job offer from the organization. However, Case 3, despite having three high SD performance (all dimensions, except workplace practices), was not preferred by the respondents. This demonstrates that respondents are willing to trade-off either of the environmental performance, community relations or marketplace practices, but are not willing to trade-off workplace practices performance. In other words, even if an organization has a good performance in environment, community relations and marketplace practices but has a stained record for its workplace practices, respondents do not consider the organization as an attractive workplace. According to Yang Spencer et al. (2013), many organizations perceive that sustainable outcomes can only be achieved at the expense of economic performance, and, as such, incorporating environmental and social practices cannot be achieved

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without pressing public opinion (Adams and Whelan, 2009). The positive link between CSB practices and organizational attractiveness for talents warrants a win-win paradigm. Although study findings cannot be generalized because of its small sample size, they still offer some valuable insights for organizations which have limited resources to be utilized for all of the four SD attributes equally. Thus, organizations can strategically focus their valuable resources in at least three of four key attributes. For example, an organization which has a minimal involvement with the environment (e.g. a small audit firm) can direct its resources in effort to improve community relations, marketplace and workplace practices and would still be perceived as attractive by its prospective employees. de Run et al. (2010), who conducted almost a similar research in USA, concluded that environmental performance was given higher priority than other issues that have a direct relationship to the respondents’ daily lives, such as employee relations. In contrast to the study by de Run et al. (2010), the findings of this study are in line with another study conducted in Malaysia jointly by Aon Hewitt and Jobstreet.com, in which 95 per cent of respondents rated “excellent working environment” as the most important attribute for organization which they would like to work (Chong, 2011). Moreover, Ramasamy et al. (2008) conducted a study among the undergraduates in China and demonstrated that work environment was the most important job attribute in an organization in deciding whether they will select the job. The emphasis given towards this attributes makes sense, as the impacts of poor work environment directly involve future employees. Findings of this study revealed that workplace was the most preferred attribute of CSB. As noted by Greening and Turban (2000), organizations can consciously market selected organizational characteristics to attract the most advantageous applicants in the labour force. Thus, understanding the most preferred attribute of CSB practices will enable organization to focus their valuable resources rightfully to market their CSR efforts for obtaining higher organizational attractiveness. This study is limited by its small sample size, which restricts the generalizability of findings from this research. The small sample size for the study is mainly due to the length of the survey and time required to comprehend and evaluate 16 different cases by each single respondent for expressing his/her agreement with the measurement items. A number of previous experimental studies have also used a small sample size. For example, the study by Rompho (2012) used only 24 participants, whereas the study by Bujisic et al. (2014) used only 35 subjects. Other than small sample size, the study has several other limitations which provide avenues for future research: • Self-reported measures for both independent and dependent variables: Although authors checked for CMV, future studies could include objective measures of “attractiveness” to avoid endogeneity issues; • The use of MBA students as respondents: Given that the students involved in the study had at least two years of company experience, future research could deliver the same questionnaire to managers working in real organizations and compare their responses with objective organizational data; and • Cross-sectional nature of the study: Future research could explore the effects of sustainability practices on talent attraction over time.

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Appendix

Case

Environmental performance

Community relations

Workplace practices

Marketplace practices

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Low High High High High High Low High Low Low Low Low Low High Low High

High High High Low Low Low Low Low High High High Low Low High Low High

High Low Low High Low High Low Low High Low Low High High High Low High

Low Low High High High Low High Low High High Low Low High High Low Low

Corresponding author Dr Mehran Nejati can be contacted at: [email protected]; [email protected] For instructions on how to order reprints of this article, please visit our website: www.emeraldgrouppublishing.com/licensing/reprints.htm Or contact us for further details: [email protected]

Table AI. Factorial design of 24 experiments