Corporate social responsibility (CSR) activity or also known as sustainability practices in Malaysia are considered as a voluntary practice. However, compared to companies in the developed countries such as in Western countries, these practices are mandatory to be adopted and practiced in the company day-to-day operations. Due to that, this study attempts to investigate the adoption of sustainability practices of manufacturing companies in Malaysia, how the companies communicated with, their stakeholders and what are the relationships between the adoption of environmental practices, social practices and stakeholder relations towards products and process innovation performance of the company.
This study adopts a quantitative approach in collecting and analysing data. All the questions that related to the variables of the study comprises of environmental practices, social practices, stakeholder relations and innovation performance are measured using a five Likert scale. Data for the study has been collected by using an online questionnaire and self-administered by distributing to all manufacturing companies that are listed on Bursa Malaysia. However, only 127 questionnaires have successfully been collected out of 165 samples that require for this study. The respondents were among the plant managers of manufacturing companies since they have more knowledge and information about the company practices, with whom they are communicated as well as the products and processes involved in its business operations.
Four hypotheses have been developed and tested in order to answer the research questions and achieve the research objectives. The findings showed that, social practices and stakeholder relations were positively and significantly related with innovation performance (products and process innovation) while environmental practices has no significant relationship with innovation performance. The result indicated that, even though sustainability practices in Malaysian context are a voluntary practice for companies, but the study discovered that most of the manufacturing companies have a high level of sustainability practices.
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