Small and medium-sized enterprises (SMEs) in Bali: Corporate social responsibility, competitive advantage and its impact on financial performance

Abstract

Climate-related concerns have drastically made companies realize the need for better environmental regulations and consolidate them in corporate business strategies such as Corporate Social Responsibility (CSR). CSR improves firm performance by valuing the stakeholders' interests and substantially achieving a competitive advantage over competitors. Recognising a firm's competitive advantage in the market indicates performance and might help the company perform better. The objective of this research  is to provide concrete proof related to how CSR affects competitive advantage and its effects on company performance, especially financial performance in SMEs in Bali Province. This study uses primary data in the form of questionnaires distributed to SMEs both directly and online. The sample of this research is the manager / owner of SMEs in Bali Province. Data analysis tools using SmartPLS 4.0. The study's findings indicate that CSR has a direct impact on financial performance  (SMEs) and CSR indirectly affects the financial performance (SMEs) through competitive advantage. Competitive advantage was found to partially mediate the impact of CSR and financial performance (SMEs). These findings will be used by SME managers in Bali Province in order to enhance the company's financial performance by considering the use of CSR strategies and strengthening competitive advantage. Implementing CSR can help a company become more competitive and separate itself from competitors by providing an innovative product or service. Finally, corporate social responsibility (CSR) can give a company a competitive advantage by strengthening its marketing abilities, which leads to improved performance.

Keywords: {'name': 'CSR'}, {'name': 'Competitive Advantage'}, {'name': 'Financial Performance'}

Authors & affiliations

Ni Luh Putu Normadewi Abdi Pradnyani
Affiliation not supplied

I Nyoman Abdi
Affiliation not supplied

Ni Made Mega Abdi Utami
Affiliation not supplied

Deposited references

Supplied references, not a list of publications citing this article.

DOI: 10.18502/kss.v3i11.4035

DOI: 10.1002/bse.1999

DOI: 10.33005/peta.v1i1.12

DOI: 10.1142/S1363919618500573

DOI: 10.1002/csr.1441

DOI: 10.1007/s10490-015-9409-0

DOI: 10.1016/j.frl.2021.102052

DOI: 10.3390/su6020872

DOI: 10.1177/0312896218771438

DOI: 10.1002/csr.285

DOI: 10.1016/j.jbankfin.2021.106322

DOI: 10.1016/j.ememar.2020.100758

DOI: 10.1016/j.jbusres.2019.07.014

DOI: 10.1007/s10551-006-9025-5

DOI: 10.1016/j.ijhm.2005.04.001

DOI: 10.1111/j.1467-6281.2011.00330.x

DOI: 10.1504/IJTM.2012.043957

DOI: 10.1007/978-3-8349-6123-5

Dewi, I. G. A. R. P., Putri, P. Y. A., & Nugraha, P. G. W. S. (2019). Corporate Social Responsibility Disclosure (CSRD) Dalam Menunjang Kinerja UMKM Art Shop Di Kawasan Nusa Dua Bali. Ilmiah Manajemen Bisnis, 5(3), 256–271.

DOI: 10.3390/su12124962

DOI: 10.1002/bse.1775

DOI: 10.1002/smj.2148

DOI: 10.17358/jabm.9.1.141

DOI: 10.1016/j.jclepro.2021.126374

Hair, J. F. (2017). A Primer On Partial Least Squares Structural Equation Modeling (PLS-SEM) (Second ed., Vol. 2). Sage Publications.

DOI: 10.1080/1331677X.2022.2026243

Hernández, A. C. C., de Velazco, J. J. H. G., Ripoll, R. R., & Hernández, I. V. R. (2020). University social responsibility in the organizational happiness management. Utopia y Praxis Latinoamericana, 25(Extra 2), 427–440. https://doi.org/10.5281/zenodo.3815332

DOI: 10.1016/j.ijhm.2009.05.006

DOI: 10.1007/s10479-017-2626-9

DOI: 10.1016/j.techfore.2021.121302

DOI: 10.1016/j.frl.2021.102497

DOI: 10.1016/j.accfor.2011.03.002

DOI: 10.1080/10599231.2019.1684169

DOI: 10.1002/csr.1678

DOI: 10.1016/j.ijhm.2014.03.006

DOI: 10.1016/j.jbusres.2012.11.008

DOI: 10.1016/j.jbusres.2019.10.020

DOI: 10.1016/j.ijhm.2008.06.003

DOI: 10.1016/j.ijhm.2012.03.007

DOI: 10.5539/ibr.v5n7p17

DOI: 10.1002/bse.2416

DOI: 10.1007/s11356-020-11822-9

DOI: 10.1002/csr.1817

DOI: 10.3390/su8070646

DOI: 10.1509/jmkg.70.4.1

DOI: 10.1016/j.jclepro.2017.09.172

DOI: 10.1016/j.fbj.2017.12.002

DOI: 10.1016/j.heliyon.2021.e06809

DOI: 10.1504/IJBPM.2018.095069

DOI: 10.1016/j.ijpe.2011.11.033

PETRENKO, O. V., AIME, F., RIDGE, J., & HILL, A. (2010). The effect of firm compensation structures on the mobility and entrepreneurship of extreme performers. Business, 920(October), 1–43. https://doi.org/10.1002/smj

DOI: 10.1057/crr.2013.17

DOI: 10.1002/sd.1699

DOI: 10.1016/j.jclepro.2012.02.011

Sekaran, U., & Bougie, R. (2017). Metode Penelitian untuk Bisnis: Pendekatan Pengembangan-Keahlian (6th ed.). Salemba Empat.

DOI: 10.5430/afr.v6n4p42

DOI: 10.3389/fpsyg.2022.883224

DOI: 10.1177/1938965513505700

DOI: 10.3390/su10103495

DOI: 10.1016/j.jclepro.2018.06.226

DOI: 10.1108/CG-06-2013-0084

DOI: 10.3390/su141710600

DOI: 10.3390/su141710600

DOI: 10.1007/s10551-012-1405-4

DOI: 10.47577/tssj.v22i1.4333

DOI: 10.1016/j.ememar.2021.100801

DOI: 10.1016/j.jclepro.2017.06.142

DOI: 10.1177/0007650309353061

DOI: 10.1007/s10551-015-2666-5

DOI: 10.1002/csr.1337

DOI: 10.3926/jiem.2994

DOI: 10.1016/j.frl.2017.05.005

DOI: 10.23887/jia.v8i1.46981

DOI: 10.1016/j.econlet.2021.110066

DOI: 10.1016/j.jhtm.2018.10.005

DOI: 10.1016/j.techsoc.2022.101868

DOI: 10.1016/j.irfa.2021.101928