Chapter three
Research methodology
3.1 Introduction
Chapter two reviewed literature on corporate social responsibility and its impact on employee, supplier, customer, community and environment also reviewed literature concerning CSR and performance in pharmaceutical companies.
This chapter will illustrate and define methodology that was adopted and applied in this research, in order to achieve the intended objectives introduced earlier in chapter one. As the most proper research methodology that served to solve research problem was the quantitative approach. Detailed justification for using this approach is provided throughout this chapter.
3.2 Selection and Justification of the Research Methodology
This section displays research design used, approaches applied, ways of data sample and collection selected and methods of data analysis in this research.
3.2.1 Purpose of Research
Churchill (1999) indicated that “Business research is divided into three categories: causal/explanatory, descriptive and exploratory”. To choose one of the mentioned categories as the main one in research it was stated that “The nature of the study depends on the stage to which knowledge about the research topic has advanced” (Sekaran 2003).
“Causal/explanatory research conducted to identify cause and affect relationships. This study is proper to be used with already documented research problem” (Zikmund 2003).
“Exploratory research is undertaken when not much in known about the situation at hand, or no information is available on how similar problems or research issues have been solved in the past” (Sekaran, 2010).
“Descriptive research describes characteristics of a population or phenomenon and provides some understanding of the nature of the problem.” (Zikmund, 2003). “The descriptive function of research is heavily dependent on instrument and observation.” (Borg & Gall, 1989).
In relation to this research, descriptive research is the most appropriate to interpret the nature that effects of the application of CSR on the overall performance of the pharmaceutical companies. As Sekaran (2010) indicated how descriptive studies that present data in a meaningful form help researches to:
1. Understand the characteristics of a group in a given situation.
2. Think systematically about aspects in a given situation.
3. Offer ideas for further probe and research.
4. Help make certain simple decisions about the study population.
3.2.2 Justification of Quantitative Methodology
Research methodology can be divided into two types: qualitative and quantitative (Ticehurst & Veal, 2000). In this research quantitative methodology has been used. It is defined as “a type of research that is explaining phenomena by collecting numerical data that are analyzed using mathematically based methods (in particular statistics)” (Creswell, 1994).
A quantitative researcher is looking for “The aim of the quantitative research method is to test pre-determined hypotheses and produce generalizable results” (Marshall, 1996).
In the other hand, qualitative researchers are “interested in understanding the meaning people have constructed, that is, how people make sense of their world and the experiences they have in the world” (Merriam, 2009, p. 13), qualitative research “is research using methods such as participant observation or case studies which result in a narrative, descriptive account of a setting or practice” (Parkinson & Drislane, 2011).
From above it would be concluded that having a specific hypothesis about CSR performance and the factors that affect this phenomenon like employee, supplier, customer, community and environment required the use of quantitative method as a way to find conclusions for the research question. As well as it is particularly suitable for the need to find out about the state of something in order to explain phenomena and occurrences.
3.2.3 Justification of Survey Method Implemented By Self-Administered Questionnaire
“A survey is any activity that collects information in an organized and methodical manner about characteristics of interest from some or all units of a population using well-defined concepts, methods and procedures, and compiles such information into a useful summary form” (Fellegi, 2003). Therefore, survey instrument was used in this research as a mean to reach the intended results.
Survey is implemented using many techniques such as face-to-face interviews, telephone surveys, self-administered questionnaires: mail surveys and other applications, internet surveys, interactive voice response and mixed mode surveys: when and why.
3.2.4 Justification of Using Self-Administered Questionnaire
“A questionnaire is a per-formulated written set of questions to which respondents record their answers, usually within rather closely defined alternatives” (Sekaran, 2010).
Sekaran (2010) explained that in certain situations questionnaire is the best choice for the researchers such as when the survey is confined to a local area, when the organization is whiling to and be able to assemble groups of employees to respond to questioners at the workplace, and when the researcher knows exactly what is required and how to measure the variables of interest. Advantages for self-administered questionnaire that researcher can collect all completed responses within a short period of time, clarifying any doubts that respondents might have on any question, motivate the respondents to offer their frank answers, less expensive and cost less time than other types like interviews.
Such a research similar to this one which is looking for measuring the effect of many factors using opinions and thoughts of related individuals on the overall performance of the workplace is best implemented using a self-administered questionnaire as “the essence of self-administered surveys is that there is no interviewer to administer the survey, pose the questions, and record the answers. The respondent administers the questionnaire, reads the questions, and records the answers and there is no interviewer to assist or explain” (de Leeuw, Hox and Dillman, 2008).
3.2.5 Measurement Scale Used in Self-Administered Questionnaire
Sekaran (2010) defined scale as “A scale is a tool or mechanism by which individuals are distinguished as to how they differ from another on the variables of interest to the study” and continued with the four basic types of scale: nominal, ordinal, interval, and ratio. Though the degree of sophistication to which the scales are fine-tuned increase progressively as we move from the nominal to ratio scale.
This research best suited with interval scale which allows us to perform certain arithmetic operations on the data collected from respondents and also measures the magnitude of the differences in the preferences among the individuals. In addition interval scale is used when responses to various items that measure variable can be tapes on a five-point or more scale, which thereafter be summed across the items (Sekaran, 2010). A Likert scale with five-point scale which is designed to state the extent to which subject agree with each of the statements in the questionnaire had been used in this research to complete data collection phase.
3.2.6 Questionnaire Structure
The research questionnaire (appendix І) consists of three parts as follows:
• Part one: gathering general information about the participant.
• Part two: gathering general information about the company.
• Part three: gathering information based on the assessment the participant submitted which showed the effect of CSR dimensions (Employees, Customers, Community, Suppliers and Environment) on company performance. Below in table (3.1) questionnaire literature review references.
Table 3.1: Questionnaire literature review references
Independent Variables
# Independent
Variables Questions Questions Sources
1 Employee
1 To what extent have safe and healthy work environment changed? Stancu et al. (2011)
2 To what extent does your company tried to improve the quality of life of employees at work? Stancu et al. (2011)
3 To what extent does your company tried to improve the quality of life of employees outside work? Stancu et al. (2011)
4 To what extent can your company maintain transparency in communicating with employees? Stancu et al. (2011)
5 To what extent can your company hold non-discrimination in employment and profession? Stancu et al. (2011)
6 To what extent does your company respect the rights of employees? Stancu et al. (2011)
7 To what extent does your company give employees fair wages and benefits package? Stancu et al. (2011)
8 To what extent does your company provide professional and personal development opportunities to employees? Stancu et al. (2011)
2 Customer
9 To what extent your organisation increased the quality of their products after being committed to social responsibility? Sweeney (2009)
10 To what extent is your company giving true information about the characteristics of the product after being committed to social responsibility? Sweeney (2009)
11 To what extent does your customer level of trust improved after being committed to social responsibility? Sweeney (2009)
3 Community
12 To what extent does your company offer training opportunities to people from the local community? EU Awareness-raising questionnaire (2014)
13 To what extent is your organisation has an open dialogue with the local community on adverse, controversial or sensitive issues that involve your company? EU Awareness-raising questionnaire (2014)
14 To what extent does your company encourage its employees to participate in local community activities? EU Awareness-raising questionnaire (2014)
15 To what extent does your organisation give regular financial support to local community activities and projects? EU Awareness-raising questionnaire (2014)
16 To what extent does your company try to purchase locally produced products? EU Awareness-raising questionnaire (2014)
4 Supplier
17 To what extent do the affected external parties participate in the defining of the CSR strategy at your company? EU Awareness-raising questionnaire (2014)
18 To what extent are your company's suppliers third-party audited on social, environmental & ethical performance? Visser (2013)
19 To what extent are your suppliers represented on any board committees or advisory boards of the company? Visser (2013)
20 To what extent does your company supply clear and accurate information and labelling about products and services, including its after-sales obligations? EU Awareness-raising questionnaire (2014)
21 To what extent does your company register and resolve complaints from suppliers and business partners? EU Awareness-raising questionnaire (2014)
5 Environment
22 To what extent does your company tried to reduce its environmental impact in terms of energy conservation? EU Awareness-raising questionnaire (2014)
23 To what extent does your company tried to reduce its environmental impact in terms of protection of the natural environment? EU Awareness-raising questionnaire (2014)
24 To what extent can your company save money by reducing its environmental impact? EU Awareness-raising questionnaire (2014)
25 To what extent does your company consider the potential environmental impacts when developing new products and services? EU Awareness-raising questionnaire (2014)
26 To what extent does your company supply clear and accurate environmental information on its products, services and activities to customers, suppliers, local community, etc.? EU Awareness-raising questionnaire (2014)
Dependent Variable
Organizational Performance
# Questions Questions Sources
1 I trust our company. Bayoud (2012)
2 Our company stands behind its products and services. Bayoud (2012)
3 Our company is a good company to work for. Bayoud (2012)
4 This organization is an environmentally responsible company. Bayoud (2012)
5 Our company has a strong record of profitability Bayoud (2012)
6 Our company is a low risk investment.. Bayoud (2012)
7 Our company is a company with strong prospects for future growth. Bayoud (2012)
8 Our company has higher customer satisfaction compared to other companies in the same industry. Wu et al. (2015)
9 Our company has better firm image compared to other companies in the same industry. Wu et al. (2015)
10 Our company market share growth increased in the market. Luzars (2008)
11 Our company market share growth bigger than competitors. Luzars (2008)
12 Our company’s change in the market share increased relative to other companies. Luzars (2008)
3.2.7 Questionnaire Translation
The adopted questionnaire in this research was translated to Arabic language due to mother language in Jordan which is "Arabic Language "as well as simplifying and smoothing of the understanding of questionnaire statements.
The meaning of every statement was carefully handled to ensure the delivery of the exact idea that researcher wanted to capture from the thoughts and opinions of targeted respondents (see appendix П).
3.3 Population and Sampling
The selected population for this research is the pharmaceutical companies in Jordan that are registered in the Jordanian Association of Pharmaceutical Manufacturers which consist of 5.414 employees.
3.3.1 Sampling Frame
“The sampling frame is a physical representation of all elements in the population from which the sample is drawn” (Sekaran, 2010). The sample frame of this research is a probability stratified sample which defined as “sampling within groups of the population” (Blaxter, Hughes & Tight, 2006) was considered from employees with administrative job title were targeted such as manager, assistant manager, head of department and supervisor and any other supervisory job available in the company.
A probability sampling design then was applied to the chosen stratified sample with simple random method which indicated that “all elements in the population are considered and each element has an equal chance of being chosen as the subject having the advantage of high generalizability of findings” (Sekaran, 2010).
3.3.2 Sampling Size
The size of the sample is for the research depends on many factors such as research objectives, the extent of precision desired (confidence interval), and the confidence level, the amount of variability in the population, the cost and time constraints and the size of the population itself.
Therefore a sample size of 10% of the whole population was taken to perform the questionnaire with the sum of 550 randomly selected employees. Questionnaire was distributed to the selected sample and total responses were 510 where collected (see appendix Ш).
3.4 Data Collection Methods
There are two types of data collection in research: secondary data and primary data. Each has been used in this research in order to cover all aspects related to the subject being investigated.
3.4.1 Secondary Data
In order to establish the research theoretical framework and having a clarified knowledge about the field of research a secondary data resources is needed as Blaxter, Hughes & Tight (2006) stated that it is the data which has already been collected, and possibly also analyzed, by somebody else. The most common forms of secondary data are official statistics collected by governments and government agencies alongside with journals, articles, internet research websites, organizations publications and prior dissertations and research papers.
3.4.2 Primary Data
There are two types of primary data collection method: interviews and self-administered questionnaires.
De Leeuw, Hox and Dillman, (2008) explained that interview surveys can either be in person or over the telephone nonetheless self-administered questionnaires take many forms: they can be used in group settings, such as classrooms in educational research, or they can be used in more individual settings, such as the respondent’s home or office or they can be computerized version by mail survey and Internet survey.
The best method that fit for collecting data to this research was self-administered questionnaires with individual settings which is the respondent’s office.
3.5 Statistical Methods Used
To achieve the research objectives different statistical methods have been used for data analysis using Statistical Package for Social Sciences (SPSS) software to analyze the data and obtain results as follows:-
• Descriptive statistics analysis including frequencies and percentages to describe the characteristics of the research sample.
• Averages and standard deviations to identify responses of all respondents to questionnaire sentences.
• Multicollinearity Test to exam the occurrence of several independent variables in a multiple regression model is closely correlated to one another.
• Pearson correlation coefficient to check the validity of internal consistency of the questionnaire.
• Cronbach's alpha coefficient to check the consistency and reliability of the questionnaire.
• Simple regression analysis to verify whether each independent variable affect dependent variable.
• Multiple regression analysis to verify whether all independent variable affect dependent variable.
3.5.1 Multicollinearity Test
Prior to the application of regression analysis to test research hypotheses some tests have been applied to ensure the appropriateness of research data to the assumptions of regression analysis, it was confirmed that there wasn’t a high correlation between independent variables through the use of linear overlap test called "Multicollinearity Test" which measured the coefficient of variation allowed (Tolerance) and the coefficient of inflation variance "Variance Inflation (VIF)" for independent variables, taking into account that the value of the allowable variation must exceed (0.05) and the inflation variation coefficient value must not exceed(10).
It is clear from table (3.3) below which summarized the mentioned tests, that Multicollinearity test values ranged between (0.351- 0.574), which is greater than (0.05), as well as variance Inflation (VIF) values were less than (10) ranged between (1.742 – 2.853) indicating a lack of a high correlation between the independent variables.
Table (3.3)
Multicollinearity Test
Coefficients a
Model Collinearity Statistics
Tolerance VIF
Employee .459 2.178
Customer .574 1.742
Community .351 2.853
Supplier .524 1.908
Environment .504 1.986
3.5.2 Questionnaire Validity
To test the validity of the internal consistency of questionnaire dimensions, Pearson correlation was used to measure the relationship between each dimension and the total score of the questionnaire. The result was as follows:-
Table (2.5)
Pearson Correlation for overall CSR dimensions
Dimension correlation coefficient
Employees 0.956**
Customers 0.924**
Community 0.943**
Suppliers 0.809**
Environment 0.890**
** significant at α ≤ 0.01 level
It was seen from table (2.5) above that all correlation coefficients between each sentence and dimension to which it belongs were positive and statistically significant at level less than (0.01). This indicates that all sentences in the questionnaire was valid and measure the object that was constructed for.
Another test has been done to assure the research questionnaire is clarity and removing ambiguity, a review and judging has been made by academic and managers from different Jordanian universities and pharmaceutical companies to the questionnaire (see appendix IV).
3.5.3 Questionnaire Reliability
To test questionnaire reliability it was found Cronbach's alpha was used coefficient for each of the dimensions in the questionnaire and the results were as follows:-
Table (3.6)
Cronbach's alpha test
Dimension Cronbach's Alpha
Employees 0.914
Customers 0.745
Community 0.836
Suppliers 0.842
Environment 0.925
CSR 0.964
companies’ performance 0.954
Table (3.6) showed that stability of Cronbach's alpha coefficients values were high which assured that the questionnaire had high level of reliability.
3.6 Conclusion
This chapter showed the selection and justification of the research methodology, sampling method and techniques, and preliminary data analysis to handle and manage issues that raised in this chapter.
The following chapter will discuss, explain and analyze data collected through questionnaire to identified research findings.