Unveiling CSR Practices in SMEs: Scale Development through Exploratory Sequential Mixed-Methods Design in Khyber Pakhtunkhwa

Abstract

Corporate Social Responsibility (CSR) is an extensively discussed term in context of large-scale organizations compared to Small and Medium Enterprises (SMEs) and there exist almost insufficient research on CSR scales which could reflect CSR practice of SMEs in developing or underdeveloped regions. This research deploys a mixed-methods research design to identify relevant CSR practices in SMEs of Khyber Pakhtunkhwa (KP).  The study draws its foundation from stakeholder theory and institutional theory. In-depth interviews were conducted to identify major CSR practice of SMEs in the province. Qualitative findings led to the development of a comprehensive instrument comprising four CSR constructs in context of SMEs. After a thorough review of the instrument from experts, it was sent to 70 industrial units across four major industrial sectors. With a 61% response rate, 378 fully complete responses were subjected to analysis. Initially, Exploratory Factor Analysis (EFA) with Principal Axis Factoring technique (PAF) and Promax rotation were performed to explore latent CSR construct. The four CSR constructs from qualitative phase of research converged onto 9 different factors. Reliability scores of all factor were above .832. Confirmatory Factor Analysis (CFA) is conducted to further refine factor structure. The development of CSR scale for SMEs by deploying a mixed-methods research design is a first attempt in context of KP. The research contributes to the existing body of knowledge on scale development in SMEs and provides significant insights for both researchers and practitioners.