Employee social responsibility practices and

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current duties, organizational pride. In addition, employee retention indicators were developed from Cammann et al. (1979) and Hom and Griffieth (1991).
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Employee social responsibility practices and outcomes in Kenya’s tourist hotels Thomas Kimeli Cheruiyot and Loice C. Maru

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Department of Marketing and Management Science, School of Business and Economics, Moi University, Eldoret, Kenya Abstract Purpose – The purpose of this paper is to explore and espouse employee corporate social responsibility (CSR) practices in classified hotels in the coastal region of Kenya, then to evaluate perceived job satisfaction, employee turnover/retention and organizational commitment by employees and explore any inherent paradox in the employee perceptions on both employee CSR practices and the job-related outcomes in the African context. Design/methodology/approach – The paper is based on an exploratory survey that targeted a population of 5,595 hotel employees from 20 selected classified hotels. A sample size of 699 employees was systematically selected and data collected using a structured questionnaire anchored on a five-point Likert scale. The instrument was evaluated for internal consistency and subjected to principal component analysis to explore extant dimensions. Findings – Though initially employee CSR practices by the hotel enterprises were defined by four dimensions, while employee job satisfaction-related outcomes were defined by three dimensions, principal component analysis revealed six dimensions of the employee CSR practices and four dimensions of the job-related outcomes. This paper, therefore, identifies and discusses the inherent paradoxes of employee job satisfaction, employee commitment and employee retention as revealed by the study. Originality/value – Internal social responsibility practices among enterprises in Africa, has relatively been downplayed by government, respective enterprise management and scholars. Keywords Kenya, Employees behaviour, Job satisfaction, Hotels, Social responsibility, Paradox, Classified hotels, Employee CSR dimensions Paper type Research paper

1. Introduction Studies on corporate social responsibility (CSR) thus far, have provided little attention to African unique social and economic situations. Furthermore, employees as a unit of analysis in CSR studies have received scant attention in the academic literature (Aguilera et al., 2005). In retrospect, CSR has been viewed as merely voluntary business activity other than a strategic business agenda and has failed to bridge the North-South socio-economic divide (Fox, 2004). Owing to the unique social and economic issues in Africa, there is an increasing need to focus on employee CSR practices and the attendant job outcomes. CSR is a multifaceted and transversal issue that impacts the organization in many different ways. Outside the organization, CSR can increase investor interest, customer demand and positive relationship with the government The authors wish to thank the two anonymous reviewers for their very useful comments on earlier drafts.

African Journal of Economic and Management Studies Vol. 3 No. 1, 2012 pp. 23-41 q Emerald Group Publishing Limited 2040-0705 DOI 10.1108/20400701211197267

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(Valentine and Fleischman, 2008). Inside the organization, it impacts on sales, marketing operations and perhaps more importantly, human resources (Jones, 1995; Porter and Kramer, 2006). The existing body of knowledge points out that CSR practices are linked to the levels of employee job satisfaction which in turn result in job outcomes that specifically relate to organizational commitment, turnover and retention (Tsaur and Lin, 2004; Valentine and Fleischman, 2008). The relationship between CSR practices and job satisfaction has been explored in Europe, North America and Asia. For instance, Tamm et al. (2010) studied employee CSR and job satisfaction in the Baltic region of Europe. Ouyang (2011) examined employees’ organizational citizenship and CSR in Asia. Ethics, perceived CSR and job satisfaction in North America was explored by among others, Valentine and Fleischman (2008). However, in the African context, this link is not clearly evident. To bridge the knowledge gap, this article focuses on employee CSR practices by classified hotels in the coastal region of Kenya, the attendant outcomes of such practices and more importantly any inherent paradox of such perceptions in such an African context. Specifically, the purpose of the article is three fold: (1) to identify employee CSR practices such as work environment, fairness of wage, employer CSR orientation and effective communication strategy; (2) to evaluate perceived job satisfaction, employee turnover/retention and organizational commitment by employees; and (3) to explore any inherent paradox in the employee perceptions on both employee CSR practices or job-related outcomes in (2). A study of these employee practices, reactions and paradoxes is critical in understanding the practical and theoretical challenges of human resource in such contexts in general and enterprises in particular. It places a caveat on the proposed impact of employee CSR in organizations. The impact of CSR on various transversal aspects in an organization is based on stakeholder theory, a theory which essentially creates a symbiotic relationship based on “give and take” between stakeholders and companies. Thus, this study draws from stakeholder theory (Freeman, 1984, 1999; Jones, 1995; Mitchell et al., 1997). This paper is organized as follows: first, we clarify stakeholder theory, followed by paradox of CSR. Methodology, results of the study, conclusions and recommendations is covered in subsequent sections. The results of the study are logically organized based on objectives of the study. 1.1 Stakeholder theory Stakeholder theory argues that every legitimate person or group participating in firms activities do so to obtain benefits and that the priority of the interests of legitimate stakeholders are not self-evident (Freeman, 1984, 1999; Donaldson and Preston, 1995; Egels-Zenden and Sandberg, 2010). Stakeholder theory is typified as either normative theory based upon largely ethical propositions or empirical/descriptive/instrumental stakeholder theories (Moir, 2001). But, Donaldson and Preston (1995) argue that CSR is nearly always instrumental. Extending this logic, the instrumental stakeholder theory ( Jones, 1995) argued that a subset of ethical principles (trust, trustworthiness and cooperativeness) can result in significant competitive advantage. However, from a practical perspective, Jones (1995) argued that the instrumental benefits of stakeholder

management paradoxically result from genuine commitment to ethical principles. Accordingly, firms that create and sustain stakeholder relationships based on mutual trust and cooperation will have a competitive advantage over those that do not. However, this trust and cooperation should be intrinsic, rather than strategic for it to be sustainable. In other words, firms must be committed to social responsibility without expecting any business benefits (Berman et al., 1999). Legitimate stakeholder groups that deserve and indeed receive attention are those who have power and require urgency. Firms with problems over employee retention, commitment and satisfaction would attend to employee issues, while those in consumer markets would focus on reputation (Moir, 2001). Accordingly, there is an increasing body of knowledge suggesting CSR initiatives influences stakeholder generalized reactions to the organization (Valentine and Fleischman, 2008). Outside the organization, various stakeholders react to social responsibility in diverse ways (Trevino and Nelson, 1999; Mcwillliams and Siegel, 2001). Inside the organization, attention to CSR could influence employee’s response to the work environment. Regardless of the programs utilized, the overall motivation is to improve employees’ execution of work from an ethical standpoint (Valentine and Fleischman, 2008). Drawing from stakeholder theory, CSR could be referred to as sustained commitment by organization to employees by adopting responsible labour practises, rights and strategies deliberately intended to ensure reciprocal outcome to the organization. Conceptually, CSR includes but is not limited to commitment to labour rights, justice and sustainability. In this article, employee CSR was viewed generally from distributive, procedural, informational and interpersonal concepts of justice as utilized in the literature (Folger and Cropanzano, 1998; Adams, 1965; Ishak and Alam, 2009) and labour rights (ILO, 1996, 2008; Government of Kenya, 2007). However, specifically, employee CSR has been defined in terms of work environment, fairness of wages, employer CSR orientation and effective communication. Conceptually, the indicators of work environment include: provision of basic amenities, leave programs, freedom from discrimination, health and safety, unionization, supervision, and performance-based payment (ILO, 1996, 2008). Fairness of wage is indicated by competitive and satisfactory salaries, fairness on account of job responsibilities, education and training; amount of effort, stress and strains of the job; pay increase; and, payment based on work done (Ishak and Alam, 2009). Employers’ social responsibility orientation is exemplified by evaluation on social responsibility issues, rewarding employees for participating in CSR activities; encouraging employees to be good citizens; management devotion to CSR activities; employer willingness to sacrifice for society; provision of special training and jobs for unemployed, encouragement of new ideas to help society; encouragement to offer voluntary service to community; and mutual beneficial effect of CSR (Ishak and Alam, 2009). Informational justice was indicated as effective communication is measured by among other things: freedom of communication; listening to employee concerns; providing information on employee issues; freedom take leave whenever appropriate (Ishak and Alam, 2009). 1.2 Employee CSR practices and outcomes CSR is a fuzzy concept with unclear boundaries and debatable legitimacy (Lantos, 2001). CSR concerns the building with customers, risk management, reputation enhancement and perhaps more importantly, attraction and retention of talented employees

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(Law Society, 2002). In the same vein, employee CSR refers to enterprise commitment to its employees through responsible practices, programs and strategies. It demonstrates the extent of labour right practices and the consequent employee job satisfaction outcomes. This article identified constructs of employee job satisfaction outcomes from job diagnostic survey (Hackman and Oldham, 1975) and modified in the face of current studies such as Spector (1997). These include: level of job security; amount of pay; personal growth and development opportunities; degree of respect from supervisor and current duties, organizational pride. In addition, employee retention indicators were developed from Cammann et al. (1979) and Hom and Griffieth (1991). These include: intention to quit the organization, intention to actively job search, conditional intention to quit and retrenchment policy. Finally, organization commitment includes: working hard beyond normal expectations, positive advocacy, caring about the fate of organization, organization pride and inspiration and congruency of values (Mowday and Lyman, 1979). Labor standards may also act as an important basis of employee CSR practices (Dodds and Joppe, 2005). Focus on human rights and labor issues are considerable in African countries partially because social legislation has been less comprehensive and the unique nature of the labour environment. Labour standards which affect the hotel industry include: women’s rights, fair wages, long working hours, qualification and skills requirements for employees, inability to join trade unions, importing of labor and displacement of traditional employment to benefit from tourism revenues. In certain countries, hotel workers often do not earn a living wage and are dependent on tips and service charges. Many workers have temporary contracts or none at all, work long hours and are employed in low-skilled areas (Dodds and Joppe, 2005). According to the ILO (2008), workers and managers in the hotel industry are often imported by the large international hotel and leisure chains. By contrast, local populations benefit only from low or semi-skilled, poorly paid jobs. Thus, this sector is known for low pay, difficult working conditions and many clandestine jobs. Labour rights are becoming a more important issue to enterprises working in poor countries (Welford, 2002). Indeed, labour rights is gaining currency in African enterprises and contexts. Managing employee behavior is instrumental in guaranteeing service quality (Tsaur and Lin, 2004). Guarantee of justice for employees in an organization could lead to positive reciprocity. A firm’s human resource management practices can create a work environment that motivates a more customer-oriented behavior from employees (Folger and Cropanzano, 1998). CSR is demonstrated effectively through dispensing organizational justice resulting in positive influence on employee motivation, job quality and performance. There is increasing focus upon the impact of human resource management on levels of productivity and quality of service within various sectors of the service industry due to the rising international competition (Baum, 1999). More emphasis has moved to the rational and culturally sensitive use of labor. Given the underlying concept of sustainable business, this approach to human resource management must be considered as an essential key to sustainability. Indeed, the perceived fairness of the working environment has been shown to impact both the employee wellbeing (such as job satisfaction, stress, health emotion) as well as organizationally relevant outcomes such as employee commitment, turnover, absenteeism, job performance and human rights (Aguilera et al., 2005).

CSR is perceived has having the potential to creating high performance in the workplaces and employee goodwill (Aguilera et al., 2005). Fostering employee loyalty boosts productivity and customer retention, attracts talented staff and is even more important for sensitive markets such as Kenya. Similarly, high standards of CSR reduce the chance of becoming a target of reprisal, negative publicity or product boycotts. Furthermore, recent work by Frankental (2001), considers the paradoxes inherent in the concept of CSR. These include paradox relating to procedures of corporate governance, the market’s view of organizations’ ethical stances, the lack of clear definition, acceptance or denial, the lack of formal mechanisms for taking responsibility and the priority that most organizations give to social responsibility. Others have examined paradox of social cost (Pava and Krausz, 1996), corporate paradox (Gaines, 2003). This follows that people in corporations should be doing their utmost to change those laws and customs that give corporations undue advantage and which are socially and environmentally damaging. Similarly, Jensen (2007) identified the stakeholder paradox. For instance on the one hand, there seems to be good reasons for claiming that a corporation has a duty to act for the benefit of all its stakeholders. On the other hand, this seems to dissolve the notion of a private business. In regard to employees, the diversity paradox was conceived by Chris (1992). Employment laws created for the purpose of eliminating discrimination and providing the means for advancement have become the very same barriers to maximizing the potential of every employee. The foregoing review calls for a need for further exploration of paradoxes that may exist in employee CSR practices and job satisfaction outcomes arising from the unique social and economic situation that prevailing in the Kenya. 2. Methodology of the study An exploratory survey design was adopted to elicit attitudes and perceptions of the employees of the sampled hotels. Exploratory design was appropriate to establish the underlying dimensions of CSR on one hand and employee job-oriented outcomes on the other hand (Baloglu and McCleary, 1999); and how they affect each other. Survey methodology was best suited for describing population characteristics, knowledge, beliefs, attitudes, preference and behavior (Masau and Prideaux, 2003). The survey covered classified hotels situated geographically at the North coast, South coast, Mombasa mainland, Malindi town and surrounding areas. The target population consisted of employees of 87 classified hotels in the coastal region of Kenya (Kenya Gazette, 2003). Specifically, payrolls for the period under study that consisted of 5,595 employees from 20 randomly selected hotel enterprises was used as a sample frame. Depending on the number of employees per hotel, proportionate sampling method was used to select a sample size of 699 employees. Systematic random sampling was used to select target respondents for questionnaire distribution. Data were collected using structured questionnaire anchored on a five-point Likert scale. The instrument was evaluated for internal consistency using Cronbach’s a and inconsistent items were omitted from further analysis. Factorability test was performed using Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy and also Bartlet’s test of sphericity. The items were subjected to principal component analysis and rotated using varimax orthogonal method. 3. Results and discussions Sections 3.1 and 3.2 of this paper focus on the employee CSR practices in the hotel enterprises and underlying dimensions, respectively. In addition, Sections 3.3 and

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3.4 provide results of employee job satisfaction-related response and dimensions of employee job satisfaction, respectively. 3.1 Employee CSR practices in hotel enterprises The study elicited employee respondent’s perceptions on the status of employee CSR in the hotel enterprises based on work environment, fairness of wage, employer social responsibility orientation and, effectiveness of communication strategy (Table I). This section focuses on identifying employee CSR practices such as work environment, fairness of wage, employer CSR orientation and effective communication strategy. 3.1.1 Perceived work environment. On a measurement scale consisting of ten items reflecting their perception on work environment included: facilities, health and safety, family leave programs, discrimination and union membership. The respondents tended to moderately agree that their employer links pay to daily performance; and, also agreed that discrimination exists in promotion/training of employees. However, they disagreed that they were provided with facilities (health housing); that they got family friendly leave programs; that there was no discrimination towards employees in hiring and firing; and, that the treatment they received from their supervisor affected their customers (Table I). Furthermore, they disagreed that their health and safety was well catered for and that the employer allows free union membership for employees, that they were freely allowed to create or belong to a trade union of their choice and finally that they had equal treatment based on merit with no form of discrimination. The results indicate that perceived discrimination exist in training, hiring and firing, while their safety was not properly catered for. Accordingly, there was poor CSR and perceived distributive justice. 3.1.2 Perceived fairness of wage. The study revealed that employee respondents disagreed that salaries were adequately competitive and satisfy their basic needs; and, that their wage was fair on account of their job responsibilities, on account of their education and training, considering the amount of effort that they had put forth, considering the stress and strains of their job and, finally considering the work that they did well. The only item they agreed with was that their wage should be increased (Table I). The results imply that extrinsic rewards present a major challenge to Kenya’s tourist hotels. This characterizes poor CSR of hotels towards their employees. In Kenya, the occasionally adjusted minimum monthly wage, currently standing at US$46 for the two main urban centers, Nairobi and Mombasa and US$27 elsewhere (Kamoche et al., 2007) has relatively stagnated in the recent past. The erosion of absolute values of salaries and wages, particularly in the public relative to the private sector, has negatively affected employee motivation and the possibilities of recruiting and retaining professionals and technical staff. Additionally, the problem of low wages and lack of fringe benefits is compounded by unfair practices in the remuneration of workers. This is manifested in lack of clear and consistent wage policies especially in the tourism sector where a huge pay differences are likely to be found. There are an extremely large number of young people aspiring to enter the labor market without the appropriate skills. Majority of entrants into the labor force have to endure a poor quality work life due to the scarcity of alternative job opportunities (Kamoche et al., 2007). 3.1.3 Perceived employer social responsibility orientation. The study revealed that the employee respondents tended to somewhat disagree that they: are evaluated

Mean SD Perceived work environment (a ¼ 0.765) My employer links my pay to my daily performance We are provided with facilities (health housing) We get family friendly leave programs No discrimination towards employees in hiring and firing Discrimination exists in promotion/training of employees The treatment I receive from my supervisor affect my customers Our health and safety is well catered for by the employer My employer allows free union membership for employees We are freely allowed to create or belong to a trade union of our choice We have equal treatment based on merit with no form of discrimination Perceived fair wage items (a ¼ 0.808) Salaries are adequately competitive and satisfy our basic needs My wage is fair on account of the job responsibilities I have My wage is fair on account of my education and training My wage is fair considering the amount of effort that I have put forth My wage is fair considering the stress and strains of my job My wage is fair considering the work that I have done well My wage should be increased Perceived employer CSR orientation (a ¼ 0.921) We are evaluated on our social responsibility actions We all feel winners in socially beneficial activities We are rewarded for participating in socially beneficial actions The employer encourages us to be good citizens Management always demonstrate devotion to social responsible activities The employer expects us to be show willingness to sacrifice self for society The employer provides special training and jobs for unemployed We are encouraged to offer voluntary services to community We are encouraged to come up with new ideas to help society I feel more customers means more work for us I like to interact with new clients at all times Effective communication items (a ¼ 0.620) Employer communicates freely to us on employment matters Employer is always ready to listen to our personal concerns We are informed on the composition of our salary/deductions/allowances/salary increases We are free to go on sick leave and maternity leave whenever appropriate

3.01 2.69 2.47 2.31 3.57 2.89 2.49 2.39 2.55 2.23

1.29 1.10 1.12 1.09 1.14 1.28 1.08 1.15 1.23 1.13

1.90 1.85 1.83 1.73 1.71 1.86 4.70

0.90 0.90 0.90 0.83 0.78 0.90 0.73

2.49 2.67 2.48 3.15 2.67 2.86 2.88 2.78 2.88 4.16 4.50

1.00 1.18 1.09 1.21 1.11 1.16 1.22 1.12 1.17 0.92 0.83

2.76 2.72

1.16 1.16

3.72 2.96

0.91 1.28

Note: 1 – strongly disagree, 2 – disagree, 3 – moderately agree, 4 – agree and 5 – strongly agree Source: Survey Data (2009)

on their social responsibility actions; all felt winners in socially beneficial activities; are rewarded for participating in socially beneficial actions; the management always demonstrate devotion to social responsible activities; and, the employer expects them to show willingness to sacrifice self for society (Table I). Further, they tended to also disagree that: the employer provides special training and jobs for unemployed; they are encouraged to offer voluntary services to community; and, that they are encouraged to come up with new ideas to help society. However, a probing on

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Table I. Perceived employee CSR status in the enterprise

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other items, revealed that they were likely to agree that the employer encourages them to be good citizens; and, strongly agreed that they felt more customers meant more work for them; and, that they like to interact with new clients at all times. 3.1.4 Effective communication strategy. Employee respondents tended to disagree that: the employer communicates freely on employment matters, the employer was always ready to listen to their personal concerns and they were free to go on sick leave and maternity leave whenever appropriate (Table I). However, they somewhat agreed that they are informed on the composition of their salary/deductions/allowances/salary increases. The results imply that there seem to be lack of commitment on the part of management to have dialogue on pertinent issues affecting employees. A sense of alienation of employees is evident since management seems not ready to listen to their personal concerns. In the recent times, employees are becoming greatly concerned with fairness in treatment on the job. To further support the debate on employee CSR practices, dimensions of employee CSR is examined in Section 3.2. This will reveal the underlying structure of these practices in the sample enterprises. 3.2 Dimensions of employee CSR in hotel enterprises For the purpose of identifying employee CSR dimensions, 34 items of organization employee CSR (Table I) were subjected to principal component analysis which yielded six components. The components extracted were labeled based on their conceptual indicators (Table II). The first dimension was designated as “employer CSR orientation” and represented 34.31 percent of variance. It comprised of a very broad set of managerial characteristics or attributes in relation to employee CSR. In total, 12 items had relatively high loadings on the dimension. The items were specifically related to management demonstration and evaluation of social responsibility actions, reward for employee participation in these activities, encouragement of employees to offer voluntary services amongst others. The employer’s social responsibility orientation is relatively poor, depicted by lack of focus on employee centered issues. This however did not correspond with lack of commitment or job dissatisfaction. This is somewhat paradoxical in that theory would expect a positive relationship between poor social responsibility practices by an enterprise and weak motivation or job satisfaction by employees. Similarly, “fair wage” was identified as the second dimension, representing 11.24 percent of variance, with six items relatively indicating high loadings on it. The items were associated with perceived fairness of wage on account of job responsibilities, education and training, on account of the job-related stress and work done well and perceived competitiveness of the salaries. The third dimension extracted representing 6.08 of the variance was labeled “perceived level of discrimination”. It comprised three items related to discrimination of employees. Specifically, the items were: lack of discrimination towards employees in hiring and firing, existence of discrimination in promotion and training of employees and finally receiving equal treatment, based on merit with no form of discrimination. The negative aspect is discrimination in promotion and training, affecting employees’ equal opportunities for growth and job satisfaction. Another dimension that was identified was labeled “work-related benefits” and represented 5.09 percent of variance. In this dimension, three items had relatively

Employee-oriented CSR indicators Management always demonstrate devotion to social responsible activities We are encouraged to offer voluntary services to community The employer expects us to be show willingness to sacrifice self for society We are encouraged to come up with new ideas to help society The employer encourages us to be good citizens We are rewarded for participating in socially beneficial actions We are evaluated on our social responsibility actions The employer provides special training and jobs for unemployed Employer is always ready to listen to our personal concerns We are free to go on sick leave and maternity leave whenever appropriate Employer communicates freely to us on employment matters We all feel winners in socially beneficial activities My wage is fair on account of the job responsibilities I have My wage is fair considering the amount of effort that I have put forth My wage is fair on account of my education and training My wage is fair considering the stress and strains of my job My reward is fair considering the work that I have done well Salaries are adequately competitive and satisfy our basic needs Discrimination exists in promotion/training of employees No discrimination towards employees in hiring and firing We have equal treatment, based on merit, with no form of discrimination We are provided with facilities (health, housing) We get family friendly leave programs Our health and safety is well catered for The treatment I receive from my supervisor affect my customers We are freely allowed to create or belong to a trade union of our choice My employer allows free union membership for employees My employer links my pay to my daily performance We are informed on the composition of our salary/ deductions or allowances/salary increases My wage should be increased

1

2

Component 3 4

5

6

Employee social responsibility practices

0.822 0.808

0.215

0.801

0.136

0.758 0.737

0.223 0.149

0.731 0.725

0.198

0.698

0.128

31

0.674 0.658 0.605 0.600 0.838 0.825 0.809 0.796 0.740 0.605 2 0.757 0.701 0.619 0.790 0.696 0.584 0.701 0.630 0.604 0.548 0.832 0.577

Notes: Rotated component matrix; extraction method: PCA; rotation method: varimax; rotation converged in six iterations; KMO measure of sampling adequacy ¼ 0.899, Bartlett’s test of sphericity ¼ x 2 ¼ 7,365; DF ¼ 253; p ¼ 0.000 Source: Survey Data (2009)

Table II. Employee-oriented CSR dimensions

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high loadings. The items were perceived provision of facilities, access to family friendly leave programs and catering for health and safety of employees. In furtherance to the above, “work environment relations” was the fifth dimension extracted representing 4.30 percent of variance with four items indicating relatively high loadings on it. The items were the employer’s link of pay to daily performance, the treatment received from supervisor affect customer service, the freedom of union membership for employees and the freedom to create or belong to a trade union of their choice. Higher significance would be desired – as pay linked to performance is more motivating/satisfying for better performance. Unionism is ripe in current labour issues in Kenya, lack of union membership that leads to felt social deprivation, which may injure job satisfaction and performance. The final dimension extracted representing 3.60 percent of variance, was labeled “sense of information and remuneration” with two items related to information on salaries and the perceived need for salaries to be increased, indicating relatively high loadings on this component. Information related to remuneration and benefits demonstrates transparency and participatory approach which is lacking in the hotel industry under study. Salary is basic motivator, for basic survival and has to be well negotiated and improved to enhance satisfaction and performance. As has been demonstrated above this is not the case in Kenya’s hotel industry. It is a paradox in the sense that in an environment characterized by lack of information, participation and poor remuneration, level of organization and job commitment amongst other outcomes appear unaffected. 3.3 Employee job satisfaction-related outcomes This section focuses on evaluate perceived job satisfaction, employee turnover/retention and organizational commitment by employees. It elicits employee satisfaction with organization’s CSR. Initially, employee satisfaction with enterprise employee CSR practices were captured using three aspects namely: perceived satisfaction with the job, retention and employee organization commitment (Table III). 3.3.1 Perceived employee job satisfaction. Employee respondents provided information reflecting their satisfaction with job security, pay, personal growth and development, respect and current duties, each on a six-item measurement scale. The results indicated that the respondents tended to disagree that: they were satisfied with the level of job security; they were satisfied with the amount of pay that they receive; and, they were satisfied with personal growth and development opportunities in the firm. They also disagreed that they were satisfied with the degree of respect received from their supervisor; and, they were not fully satisfied with current duties. However, the respondents agreed that they were proud to belong to the organizations team. This indicates a paradox of employee job satisfaction (PES). The findings show that employees were generally dissatisfied with all aspects of their work. The concept of job satisfaction is the reintegration of affect produced by individual’s perception of fulfillment of his needs in relation to his work and the situations surrounding it. It may be perceived to be very diverse within the same organization and even temporally from organization to another. Psychological, physiological and environmental circumstances influence the individual’s level of satisfaction. Further, the level of satisfaction had an important implication for work behavior particularly competitiveness of the hotel enterprises. Other aspects of work

Employee perceived satisfaction with the job (a ¼ 0.796) I’m satisfied with the level of job security I’m satisfied with the amount of pay that I receive I’m satisfied with personal growth and development opportunities in the firm I’m satisfied with the degree of respect I receive from my supervisor I’m fully satisfied with my current duties I’m proud to belong the organizations team Employee retention items (a ¼ 0.795) I often think of leaving the organization It is very likely that I will actively look for a new job in the next year I will leave this organization in the next one year I’m not going to leave this organization in the near future I will leave given an opportunity in another organization My employer is unlikely to retrench employees Organization commitment items (a ¼ 0.741) I work hard beyond normal expectations in order to help this firm be successful I talk about this organization to my friends as a great firm to work for I really care about the fate of this hotel This organization really inspires the very best in me in the way of job performance I’m proud to tell others that I’m part of this hotel My values and the organization’s values are very similar I’m not willing to work extra beyond stipulated time

Mean

SD

2.15 1.59 2.39 2.86 2.85 3.30

1.13 0.71 1.08 1.18 1.16 1.14

2.87 2.90 2.71 2.46 3.87 1.95

1.13 1.11 1.03 1.07 1.17 1.04

4.03 3.13 3.59 2.96 3.18 2.81 2.68

1.05 1.04 1.00 1.05 1.04 1.01 1.24

Notes: n ¼ 700; 1 – strongly disagree, 2 – disagree, 3 – moderately agree, 4 – agree and 5 – strongly agree Source: Survey Data (2009)

behavior that may be influenced by satisfaction include absenteeism, adjustment, productivity and union affiliation. Since only satisfied employees could promote positive contact between themselves and customers, it would be implied, therefore that the present state of dissatisfaction would only lead to poor motivation which may be reflected in the poor service quality at the customer contact point. 3.3.2 Perceived employee turnover and retention. The respondents provided information on their possible retention or plan to leave the organization on a measurement scale consisted of six items reflecting their quit intentions, their active or passive intention to leave and the existence, if any, of a time frame within which the respondent plans to leave. The results showed that they tended to disagree that: they often think of leaving the organization, it is very likely they will actively look for a new job in the next year, they will leave the organization in the next one year and that they would not leave the organization in the near future. However, they agreed with the statement that they would leave given an opportunity in another organization and strongly disagreed with the statement that their employer is unlikely to retrench them (Table II). The findings indicate high level of employee retention and willingness to work for the hotel at least until they are assured of another job opportunity. Employee satisfaction is an ultimate strategic human resource goal of every organization. Since the hotel business is a labor-intensive and quality-driven service industry (ILO, 2008),

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Table III. Employee perceived job satisfaction outcomes

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employee retention is very important competitiveness issue for valued skilled and productive employees. It is argued that the hotel sector suffers from high levels of labor turnover. This provides a constant challenge for employers’ limited ability to maintain a skilled workforce and results in increased labor-related costs. Accordingly, these findings indicate a paradox of employee retention (PER) since the employees expressed their level of job dissatisfaction on almost all dimensions, though they registered their unwillingness to actively quit the organization. This may be explained by the Kenya’s labor market characterized by high unemployment and low skills and competencies at the technical and professional level. Most African countries Kenya included attained independence with a huge deficit in skilled human resources (Kamoche et al., 2007). Only few countries have so far managed to meet their manpower requirements in most areas, with few deficits existing only in a few professional and technical areas. In the context of the hotel industry, the level of skilled manpower is still weak especially at the managerial level. In such an environment, youth unemployment with low skills base is changing employee’s traditional responsiveness to perceived organizational justice. 3.3.3 Perceived organization commitment. On this construct, employees elicited responses on their perceived organization commitment particularly in regard to hard work beyond normal expectations, positive advocacy, caring about the fate of the firm, congruency of values, organization pride and inspiration from the firm. On a measurement scale consisting of seven items anchored on a five-point Likert scale, employee respondents indicated their perceived organization commitment from strongly disagree to strongly agree. The results showed they tended to agree that: they work hard beyond normal expectations in order to help the firm be successful, talk about the organization to friends as a great firm to work for, really care about the fate of the hotel and finally that they were proud to tell others that they were part of the hotel (Table III). On the other hand, the respondents disagreed with the statements that: the organization really inspires the very best in them in the way of job performance, their values and the organization’s values were very similar and that they were not willing to work extra beyond stipulated time. This demonstrates paradox of employee commitment (PEC) as it indicates sense of self-contradiction. To further reinforce and deepen debate on employee job satisfaction outcomes, dimensions of employee job satisfaction was examined in Section 3.4. This will reveal the underlying structure of these outcomes in the sample enterprises. 3.4 Dimensions of employee job satisfaction outcomes It is expected that employee satisfaction or dissatisfaction with the organization’s employee CSR would be reflected in their job satisfaction which in turn would lead to some job-related outcomes. The results of principal component analysis yielded four dimensions of perceived employee job-related outcomes representing a total variance extracted of 59.81 percent (Table IV). The first dimension was denoted “perceived organization attachment and turnover intentions” representing 34.03 percent of variance. Seven items relating to quit intentions and organizational attachment loaded significantly on this dimension. The specific items were the likelihood of actively looking for a new job in the next year, intention of leaving the organization in the next one year, often thinking of quitting

Perceived employee job satisfaction indicators It is very likely that I will actively look for a new job in the next year I will leave this organization in the next one year I often think of quitting the organization I’m proud to tell others that I’m part of this hotel My values and the organization’s values are very similar This organization really inspires the very best in me in the way of job performance I talk about this organization to my friends as a great firm to work for I’m proud to belong to the organizations team I’m satisfied with personal growth and development opportunities in the firm I’m satisfied with the level of job security I’m fully satisfied with my current duties I’m satisfied with the amount of pay that I receive I’m satisfied with the degree of respect I receive from my supervisor Will quit given an opportunity in another organization I work hard beyond normal expectations in order to help this firm be successful I really care about the fate of this hotel I like to interact with new clients at all times I feel more customers means more work for us

1

Component 2 3

4

2 0.844 2 0.815 2 0.701 0.637

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0.628 0.588 0.560 0.483 0.736 0.725 0.632 0.628 0.555

0.800 0.762 0.811 0.803

Notes: Rotated component matrix; extraction method: principal component analysis; rotation method: varimax with Kaiser; normalization: a rotation converged in six iterations, a four components extracted; KMO measure of sampling adequacy ¼ 0.925, Bartlett’s test of sphericity ¼ x 2 ¼ 9,999.5; DF ¼ 378; p ¼ 0.000 Source: Survey Data (2009)

the organization, he/she is proud to tell others of being part of the organization, sharing very similar values with the organization, the organization being a real inspiration in the way of job performance and reference to friends about the organization as a great place to work. This is a critical dimension that demonstrates employee satisfaction. The second dimension denoted appropriately as “perceived job satisfaction” was extracted explaining 10.97 percent of variance. Five items had relatively high loadings on this component. These were employee satisfaction with personal growth and development opportunities in the firm, satisfaction with degree of respect received from the supervisor, satisfaction with their current duties and satisfaction with the amount of pay and satisfaction with job security. This outcome reflects the employee positive response contingent upon socially responsible activities. Another dimension labeled “level of organization commitment” was extracted representing 8.40 percent of variance. Two items had relatively high loadings on this component. The items were that she or he works hard beyond normal expectations in order to help the firm be successful and also that she or he really cared about the fate

Table IV. Dimensions of perceived employee job satisfaction outcomes

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of the organization. This is an important dimension. Working beyond expectation and fear for organizational fate is an indication of apathy on job retention and this may be unique to a developing country like Kenya where unemployment is on the rise. Hotels should not take advantage of this, but should genuinely address employee CSR issues to enhance employee performance. Finally, a dimension labeled “perceived job commitment” was extracted that explained 6.42 percent of variance. Two items had relatively high loadings on this component. The item that had negative but significant loading on the component was the perception that employer is unlikely to retrench employees. However, two other items had positive but significant loadings. These were that he or she would like to interact with new clients at all times and also that he or she feels that more customers meant more work for the employees. This is a sense of lack of job security. 3.5 Relationship between employee CSR practices and employee job-related outcomes On work environment CSR issue, evidence of some perceived discrimination of employees in hiring and firing was evident. Poor CSR was evident as shown by perceived lack of union membership, weak health and safety and provision of facilities. Pay was linked to performance. Discrimination exists in training and promotion. On fair wage, there was evidence of perceived lack of fairness in the wage in all dimension/respects. The employees felt their wages needed to be increased. This was a departure from empirical evidence elsewhere. For instance Sharpley and Forsters (2003) found hotel employees to be satisfied with the wages they earned and would not work harder if they were paid more. Since it has been argued that it takes happy employees to make happy customers (Hope and Muhlemann, 1998). Further, employees showed high level of dissatisfaction on all job dimensions for instance job security, growth and development, respect from supervisor and current duties. However, they indicated some pride to belong to the organizations team. A positive relationship was found in Taiwan between training and higher levels of employee behavior in tourist hotel (Tsaur and Lin, 2004). Similarly, employees did indicate they were not planning to leave the organization. This showed low perceived quit intentions and thus a high perceived employee retention. It was clearly established that employees had no active plans to leave the organization unless given an opportunity in another organization. This was different with findings by Sharpley and Forsters (2003) who found that in Cyprus, majority of hotel employees surveyed did not want to look for another job. In the current study, the employees indicated they were willing to leave ultimately but on condition of job mobility. Accordingly, retention was based on labor market characteristics for instance, availability of jobs and perhaps on a less degree commitment. Paradoxically, they reported high commitment despite previous poor CSR record on work environment, fairness in wages and employer’s effectiveness in communication. Additionally, the study revealed that employees’ personal values were not similar to those of their organizations. The organizations did not really inspire them in respect to job performance. On employees CSR orientation, the employees indicated poor hotel CSR record including lack of evaluation of CSR actions, rewards, training for unemployed, amongst others. This finding is consistent with altruistic approach to CSR. For instance, if a firm provides job training for the hardcore unemployed, there is no certainty that they will be productive employees or even end up working

for that organization. Indeed, some firms can free ride off the efforts and expenditures of other companies. They, however, felt that they were being encouraged to be good citizens. On effective communication strategy, there was poor perceived communication between the management of enterprise and the employees on key employment matters, except on salary, allowances and deductions. According to Sharpley and Forsters (2003) communication, information sharing and empowerment are all forms of employee involvement, a key dimension within successful service organization. This important component of sustainable human resource strategy is currently lacking. Similar studies like Tsaur and Lin (2004) considered human resource practices, service behavior and service quality of tourist hotels in Taiwan. They found support for previous studies that there was a positive relationship between human resource practices and service quality. 4. Conclusion and implications This paper set to explore employee CSR practices in sample hotels in Kenya. This was particularly in regard to work environment, fairness of wage, employer CSR orientation and effective communication strategy. In addition, evaluated employee perceived job satisfaction, turnover, retention and organizational commitment. Finally, it studied the inherent paradox in the employee perceptions on both employee CSR practices and job-related outcomes. A survey of hotel employee respondents was carried out. The findings demonstrated poor work environment, lack of fair wage guidelines, lack of participation and information on important job-related issues, it may be concluded that the classified hotel enterprises in Kenya showed little regard for employee social responsibility. Work environment characterized by among others lack of facilities, lack of unionization and discriminatory is evident. Wage levels is not competitive enough and does not satisfy employee basic needs, disregard among others; education and training, responsibilities, job effort enough and stress and strains of the job. It is indicated by most employee accounts that the employers exhibit poor social responsibility orientation. Internal CSR in Kenya, particularly responsible practices to employees has remained a peripheral and neglected issue. It also highlighted inherent paradox of CSR practices and perceptions in Kenya specifically and Africa generally. Logically, employees who perceive their job to be secure and offering future prospects would be more committed to their work and thus be “happier” and contribute to the organization performance. In Kenya’s work environment, employees may specify high perceived job commitment, but this may not be demonstrated in job performance. Job commitment is crucial for the service industry such as the hotel enterprises. A strategic approach to human resource management should built job and organizational commitment of employees. For the framework to qualify to be strategic, it must create a niche for the country that would facilitate the cultivation, nurturing and sustenance of a competitive advantage at the point of contact with customers. This would be possible if it would be aimed that developing a fit between the needs of the employee, job, organization and the environment. By so doing it would guarantee that employees reach their desired level of satisfaction and performance and organizations both in the public and private sectors meet their goals. It would also ensure a better and a more effective utilization of existing human resource thus contributing to economic development.

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However, despite the status of social responsibility as elucidated above, the employee response has been somewhat contradictory and hence paradoxical. Employees have indicated their job and organization commitment, high level of job retention, positive advocacy among others despite the weak internal CSR. This article has identified the PES, PEC and PER. The former is characterized further by job commitment paradox and organization commitment paradox. A strategic human resource policy should ensure the nation’s most important and abundant resource people is utilized effectively to ensure the country’s gains and maintains competitiveness. As such, the strategic management of people in organizations must entail efforts to make the best use of human resources in the attainment of organizational objectives. The effective utilization of human resources leads to the delivery of services. The organizations must attract, retain and keep motivated and effectively utilize various human resources.

4.1 Implications for theory The theoretical implication for this study is centered on a suggested paradigmatic shift from social economic approach to social-human and stakeholder approach. The theoretical implication of the current study is that though stakeholder theory is useful in reconciling various interests, perceptual issues may influence the results due to paradoxical outcomes or dissonance between perceptions and organizational practices.

4.2 Implications for managerial practice and policy Generally, there was apparently poor employee-oriented CSR in Kenya’s hotel enterprises. However, lack of satisfaction on key CSR issues was not directly associated with negative outcomes such as commitment and turnover intentions. Presumably, employee’s commitment and retention could be as a result of unique economic and social factors in African context. Paradoxically, this is unlikely to be sustainable since international labour practices are fast gaining currency in Africa. Further the study could have managerial implications on adoption of strategic CSR on certain key areas. The strategies for employee satisfaction and retention could be formulated from the employee CSR practices. The study also found participatory approaches to management of the enterprises was lacking for the most part with regard to employees. Since employee job satisfaction is necessary in an instrumental stakeholder framework, salient stakeholders need to be involved in key issues affecting them. A participatory approach that is conclusive, effective and satisfactory should be developed. Corporate communication and dialogue should form an integral part of this approach. The organizations could adopt industry wide codes and standards that will raise the level of compliance to international employee CSR practices of the industry in Kenya. This may cascade down to some other hotels that were not even targeted for study. Government policy framework should incorporate a multi-stakeholder approach to policy formulation. Since competitiveness in the hotel organization in particular depends on social and human aspects, this could be addressed effectively only through incorporating a new approach based on sustainability and competitiveness.

4.3 Recommendations for further study The study should be extended to other industries could also be compared with classified hotels and extended to other contexts. Since the theoretical underpinnings of responsible competitiveness or sustainable competitiveness is still developing, it may be necessary to explore the aspects of the subject using qualitative methods in order to build knowledge and propositions. There is also possibility of applying longitudinal design to the concept of social responsibility and competitiveness. Finally, several paradox of social responsibility, found by this study to coexist with otherwise theoretically inconsistent employee perceptions about the enterprise could be explored further. References Adams, J.A. (1965), “Inequity in social exchange”, in Berkowitz, L. (Ed.), Advances in Experimental Social Psychology, Academic Press, New York, NY, pp. 267-99. Aguilera, R.V., Rupp, D.E., Williams, C.A. and Ganapathi, J. (2005), “Putting the back in corporate social responsibility: a multi level theory of social change in organizations”, Academy of Management Review, Vol. 16. Baloglu, S. and McCleary, K.W. (1999), “A model designation image formation”, Annals of Tourism Research, Vol. 26 No. 4, pp. 888-97. Baum, T. (1999), Managing Human Resources in the European Tourism and Hospitality Industry: A Strategic Approach, Chapman & Hall, London. Berman, S.L., Wicks, A.C., Kotha, S. and Jones, T.M. (1999), “Intrinsic stakeholder commitment”, Academy of Management Journal, No. 5, pp. 10-42. Cammann, C., Fichman, M., Jenkins, D. and Klesh, J. (1979), “The Michigan organizational assessment questionnaire”, unpublished manuscript, University of Michigan, Michigan, MA. Chris, C. (1992), “The diversity paradox”, Personnel Journal. Dodds, R. and Joppe, M. (2005), “CSR in the tourism industry? The status of and potential for certification, codes of conduct and guidelines”, Study prepared for the CSR Practice Foreign Investment Advisory Service Investment Climate Department, The World Bank, Washington, DC. Donaldson, T. and Preston, L.E. (1995), “The stakeholder theory of the corporation: concepts, evidence and implications”, Academy of Management Review, Vol. 20 No. 1, pp. 65-91. Egels-Zenden, N. and Sandberg, J. (2010), “Distinctions in descriptive and instrumental stakeholder theory: a challenge for empirical research”, Business Ethics: European Review, Vol. 19 No. 1. Folger, R. and Cropanzano, R. (1998), Organizational Justice and Human Resource Management, Sage, Thousand Oaks, CA. Fox, T. (2004), “Corporate social responsibility and development, in quest of an agenda”, Development, Vol. 47 No. 3, pp. 29-36. Frankental, P. (2001), “Corporate social responsibility – a PR invention?”, Corporate Communications: An International Journal, Vol. 6 No. 1, pp. 18-23. Freeman, R.E. (1984), Strategic Management: A Stakeholder Approach, Pitman, Boston, MA. Freeman, R.E. (1999), “Divergent stakeholder theory”, Academy of Management Review, Vol. 24, pp. 233-6. Gaines, A. (2003), “The corporate paradox: corporate social responsibility in an age of corporate-induced breakdown”, Journal of Corporate Citizenship, No. 10, p. 4.

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Hom, P.W. and Griffieth, R.W. (1991), “Structural equation modeling test of turnover theory: cross-sectional and longitudinal analyses”, Journal of Applied Psychology, Vol. 76, pp. 350-66. Hope, C. and Muhlemann, A. (1998), “Total quality, human resource management and tourism”, Tourism Economics, Vol. 4 No. 4, pp. 367-86. ILO (1996), “The ‘human development enterprise’: seeking flexibility security and efficiency”, paper presented to the ILO Enterprise Forum, Geneva. ILO (2008), Labour Market Policies, Poverty and Insecurity, UN Research Institute for Social Development, Geneva. Ishak, N.A. and Alam, S. (2009), “The effects of leader-member exchange on organizational justice and organizational citizenship behavior: empirical study”, European Journal of Social Sciences, Vol. 8 No. 2, p. 324. Jensen, K.K. (2007), “Corporate responsibility: the stakeholder paradox reconsidered”, Journal of Agricultural and Environmental Ethics , Vol. 26 No. 6. Jones, T.M. (1995), “Instrumental stakeholder theory: a synthesis of ethics and economics”, Academy of Management Review, Vol. 20 No. 2, pp. 404-37. Kamoche, K.N. (2007), Managing Human Resources in Africa, Routledge, London. Kamoche, K., Debrah, Y., Frank, H. and Gerry, N.M. (2004), Managing Human Resources in Africa, Global Human Resource Management Series, New York, NY. The Kenya Gazette (2003), special issue, registered as newspaper GPO Vol. CV No. 62, Gazzette Notice No. 3976, published by the authority of the Republic of Kenya. Law Society (2002), “Corporate Social Responsibility”, a view from International Unit, September.

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Pava, M. and Krausz, J. (1996), “The association between corporate social responsibility and financial performance: the paradox of social cost”, Journal of Business Ethics, Vol. 15, pp. 321-57. Porter, M.E. and Kramer, M.R. (2006), “Strategy and society: the link between competitive advantage and corporate social responsibility”, Harvard Business Review, Spotlight, December. Sharpley, R. and Forsters, G. (2003), The Implication of Employee Attitude for the Development of Quality Tourism in the Case of Cyprus, Newcastle Business School, Centre for Travel and Tourism Northumber Land University, Newcastle upon Tyne, pp. 687-97. Spector, P.E. (1997), Job Satisfaction: Application, Assessment, Causes and Consequences, Sage, Thousand Oaks, CA. Tamm, K., Eamets, R. and Motsmees, P. (2010), “Relationship between corporate social responsibility and job satisfaction: the case of Baltic countries”, working papers, The University of Tartu, FEBA, Latvia. Trevino, L.K. and Nelson, K.A. (1999), Managing Business Ethics, Straight Talk about How to Do It Right, 2nd ed., Wiley, New York, NY. Tsaur, S. and Lin, H. (2004), Promoting Service Quality in Tourism Hotels, the Role of HRM Practices and Service Behavior, Graduate Institute of International Business Administration, Chinese Culture University, Taipei. Valentine, S. and Fleischman, G. (2008), “Ethics programs, perceived corporate social responsibility and job satisfaction”, Journal of Business Ethics, Vol. 77, pp. 159-72. Welford, R. (2002), “Globalization, corporate social responsibility and human rights”, Corporate Social Responsibility and Environmental Management, Vol. 9, pp. 1-7. Further reading Chen, C. (2000), “The diversity paradox”, Personnel Journal, Vol. 71 No. 1, pp. 32-5. Karsten, K.J. (2007), “Corporate responsibility: the stakeholder paradox reconsidered”, Journal of Agricultural and Environmental Ethics, Vol. 20 No. 6. Riisgard, L. (2004), “The IUF/COLSIBA-Chiquita framework agreement”, Working Paper 94, A Case Study International Labor Office, Geneva. About the authors Dr Thomas Kimeli Cheruiyot is currently a Senior Lecturer in Strategic Management and Organisation Studies. His Doctoral thesis was on “Strategic social responsibility and competitiveness”. His areas of research interest include, among others, corporate social responsibility and governance, strategic management, human resource management and entrepreneurship. Dr Thomas Kimeli Cheruiyot is the corresponding author and can be contacted at: [email protected] Dr Loice C. Maru is currently a Senior Lecturer in Entrepreneurship and Micro-Enterprise Management, Human Resource Management and General Principles of Management. She has a Doctor of Philosophy degree in Business Management (Strategic Management Option); a Master of Philosophy in Entrepreneurship Studies (2004); and a Bachelor’s degree in Business Management (Hons) (Human Resource Option, 2001). Her areas of research interest include entrepreneurship, sustainable management and strategic management.

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