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For the requirements of corporate social responsibility evaluation, the system must deliver meaningful results in terms of causal relationships and a structural approach; that is to say that the analysis shall be model-based. SEM provides a means by which relationships can be tested. To estimate the strength of these causal connections, it is necessary for each of the latent variables to be operational in terms of manifest variables measurement items.
In reality, the manifest variables are measured by using measurement instruments, such as questionnaires; also, they serve as indicators of the latent variable. In this research, the corporate social responsibility model CSRM for Agro-processing and Garment industries strategic planning systems divides into six latent variables i.
This paper addressed to what extent corporations are operating in the socially responsible way i. A total of full responses were received for analysis of CSR implementation. Descriptive results showed in Table 2 that most Based on respondents response, the reasons of industries participating in CSR activities are; the first reason is because of competition in the industry both from domestic and international firms Currently, large industries in Ethiopia have interested to implement CSR activities for the sake of stakeholders.
Now it has awareness of the importance of including budget to perform their CSR activities that increase their competition and profit. Table 1. C Garment textile East Africa bottling S. The result of Gray and Gray showed that CSR is commonly measured using categorical indicators in addition to continuous ones.
After reviewing different pieces of literature on CSR, we developed a questionnaire to measure different characteristics of CSR implementation of large industries of the Amhara region, Ethiopia. The questionnaires are measurement scales providing scores based on the sum of responses to items questions.
A CSR implementation measurement instrument is given in Table 3 and it includes 55 items grouped into six contributing factors and CSR implementation. The measure of CSR implementation specifically focused on internal stakeholder perception. The perception of employees concerning the responsibilities toward different stakeholders and the CSR activities of their industry was captured through a questionnaire instrument.
Table 3. Organizing programs for cleaning environment. Planting trees. This study used the methodology proposed by Anderson and Gerbing to perform structural equation modeling. They recommend analyzing the measurement model followed by the structural model. For assessing the measurement model, Table 4 indicated that the results of the confirmatory factor analysis CFA. With a measurement model, CFA is used to test the hypothesis that a relationship between observed variables and their underlying unobserved latent variable construct exists.
An observed variable of the CSR model must be valid and reliable. Consider Hair, Black, Babin, and Anderson , a factor loading represents the correlation between an observed variable and its construct. The average variance extracted is a measure of convergence among a set of observed variables representing a latent construct. It is the average percentage of variation explained by the observed variables of a construct.
As suggested by Campbell and Fiske , two aspects to assess the construct validity of a test: the first is Convergent validity is the degree of confidence we have that a latent variable is well measured by its indicators. The second, Discriminant validity is the degree to which measures of different latent variables are unrelated. The criterion of Fornell and Larcker has been commonly used to assess the degree of shared variance between the latent variables of the model.
According to the Fornell and Larcker testing system, discriminant validity can be assessed by comparing the amount of the variance captured by the construct and the shared variance with other constructs. Table 4. As shown in the bottom of Table 4 indicated to assess goodness of fit of measurement model using the likelihood ratio chi-square value of This preliminary goodness of fit statistics suggests a significant difference between the specified model and observed data.
This may be the case for this study since the measurement model has degrees of freedom which is large. Table 4 result indicated TLI is 0. Table 4 confirmed that SRMR is 0. Hence, these all indices are within the recommended cutting points which indicate a good model fit. As a result, the quality of the measurement and the suitability of the model were accepted.
In this study, construct validity was evaluated based on different components; convergent validity or reliability , and discriminant validity. The evaluation of convergent and discriminant validity results presented in Table 4. The measurement items were derived from the existing literature that was used in past measurement studies.
All items in a construct should converge to establish convergent validity. Convergent validity is established statistically when items that are meant to converge measure the same constructs have similar scores.
AVE measures the level of variance captured by a latent construct versus the level due to measurement error, values above 0. Convergent validity is established if an AVE of 0. According to Kline , the majority of the variance of each indicator should be explained by the factor. In other words, standardized loadings should all be greater than 0.
If all loadings on a factor are greater than 0. Hence, the standardized factor loading of all indicators is greater than acceptable convergent quality 0. Hence, the convergent validity of the proposed model is confirmed. For example, the standardized factor loading for x2 onto the latent construct OWN was 0. Internal consistency or reliability refers to the extent to which a variable or set of variables is consistent in what it is intended to measure Hair et al.
The reliability of a scale indicates how free it is from random error: it is the degree to which the items that make up the scale are all measuring the same underlying attribute i. Internal consistency can be measured in several ways. Hence, the CSR measuring model is a high level of internal consistency or reliability for all seven constructs. Anderson and Gerbing noted that to ensure discriminant validity, correlation values between latent constructs must be significantly different from zero, and there should not be any high or very high correlations.
According to Table 5, the Convergent and discriminant validity result is shown. Hence, each measurement item represents only its loaded construct. Table 5. Structural equation modeling with a latent variable is a multivariate statistical technique. It encompasses a broad array of models from linear regression to measurement models to simultaneous equations. Outer measurement coefficient shows how each question indicator loads into the respective factors latent variable in the corporate social responsibility model.
Table 4 indicates how each observed variable contributes to the respective factors of the CSR model. The responses to the research questions have to be addressed; outer coefficients weights are analyzed to facilitate the interpretation of the results. The value 0. Share ownership of the industry as a dimension of the employees is also contributing little to the overall CSR implementation i.
Besides, as shown in the outer coefficient is 0. And also industries gave training and education opportunities for employees, as indicated the outer coefficient is 0. On the other hand, the companies had an environmental permit, environmental policy, environmental management system and sustainability of the environmental protection on the dimension of the environment; their outer coefficients are 0. The industries offer little training opportunities for local communities for the dimension of community, as shown by the outer coefficient of 0.
On contrary, industries were sponsoring the sport, maintaining parks and roads, support for the arts and culture, supporting services for elders, children and disabled persons and support for public health of local communities; their outer coefficients are 0.
The outer coefficient of 0. Also, industries are provided information about its products and services, respect the right of customers, and avoid unhealthy trade practice, rising customer satisfaction and supply goods of the right quality, quantity at the right place and time at reasonable prices with their outer coefficient 0.
The outer coefficient or weight of 0. In general, it was contributing much to the government dimension of CSR implementation. Inner or path coefficients are indications of the relationship between the independent and the dependent latent variables of the structural or inner model. Estimated path coefficients are analogous to regression coefficients. These path coefficients can be interpreted similarly to standardized beta coefficients in a regression analysis.
According to Hair et al. The strength of the relationship is a proportion of the regression sum of squares corresponding to latent constructs. Table 6 indicated that the values for the coefficient of determination for the paths leading to corporate social responsibility. The higher the value of the coefficient of determination, the better the model fits the data. The values of coefficient of determination resulted for latent; OWN 0. The minimum value of at least 0. In this study result, all coefficients of determination values were greater than 0.
Table 6. The measurement model was converted into a structural model by drawing a path diagram between each latent construct and CSR implementation to test all hypotheses. The constructed structural model is presented in Figure 1. All estimates were standardized in the model to aid interpretation.
The coefficient of determination of the model is 97 percent which indicates that the six factors collectively accounted for a majority of the variances in CSR implementation in the Amhara Region, Ethiopia. Regression coefficient estimates of the structural model are summarized in Table 7, the company will know how each criterion impacts on the overall corporate social responsibility implementation structural or path coefficients and where improvement efforts are more likely to have a greater impact.
While the employee hurts CSR implementation. Their standardized estimates are 0. Figure 1. About Helmig et al. The stakeholders model Freeman, and claims that a firm is responsible not only to its shareholders owners but to all stakeholders consumers, employees, creditors, etc.
Thus, CSR means that a corporation should be held accountable for any of its actions that affect people, communities and the environment in which those people or communities live Frederick et al. The empirical results of this study suggest the following main conclusions. In particular, we confirmed that Environment is one of the greatest direct influencing factors on CSR implementation for large industries in the Amhara region, Ethiopia.
Industries should give more emphasis on environment protection and sustainability for CSR implementation. From the survey, industries had an environmental permit, policy, and environmental management system and sustainability of the environmental protection on the dimension of the environment. This study contributes that environmental factors lead to stronger CSR implementation.
These rule compliance environmental-related activities involve waste management system, proper resource utilization and planting trees in its premises and the vicinity. Customer is the second major factor affecting CSR implementation. The survey respondents felt that the industries provide information about its products, respect the right of customers, supply products of the right quality, right quantity at the right place and time at reasonable prices.
There is also a good satisfaction with customers on company product. This finding consistent with Sen, Bhattacharya, and Korschun ; Helmig et al. It also showed that customers should be involved in the strategic prioritization of CSR activities. Also, Perez and Bosque showed that when customers perceive that companies have altruistic motivations for designing and implementing CSR initiatives, they are more credible and customers perceive more positive CSR images. In contrast, companies lose credibility when customers anticipate corporate intrinsic motivations for developing CSR initiatives.
From the survey, the companies have a vision, mission, and regulation on CSR and have an internal control system to monitor and enforce CSR. Hence, it was well contributed to CSR implementation. This result not confirmed with Fatma, Rahman, and Khan ; Brown and Dacin that identified the shareholder domain is least rated, as it has been demonstrated that the responsibilities towards the shareholders are the inherent activity of the organization and are not considered to be part of CSR.
The community is ranked fourth in terms of its effect on CSR implementation. According to the survey, an industry makes support for maintaining parks and roads, art and culture development, education, health, and sport. In other ways, industries were not contributed much to the creation of employment opportunities and support for elders, children, the disabled and displaced person of local communities. Fatma et al.
The employee is the last and hurts the implementation of CSR. Survey respondents felt that companies gave training and further education opportunities for employees and also there were safe and secure working conditions and job satisfaction of employees. There was no way for employees to be a shareholder. Also, Helmig et al. The stakeholders with the strongest influence on the pressure exerted by primary stakeholders are employees.
Firm activities are always carefully observed by their employees. Therefore, acting in a socially responsible manner could be a source of competitive advantage concerning the role of employees in the firm e. This result not consistent with Alemayehu and indicated that the company is very considerate in undertaking CSR activities related to the safety, security, benefits, development and overall wellbeing of its employees.
In this study, the determinant factors to the implementation of CSR practice in Agro-processing and garment Textile and leather industries of the Amhara region, Ethiopia have been identified, ranked, and discussed. After reviewing the previous literature, six factors of CSR practice were identified i. The sample survey was conducted and full responses of employees of thirteen large industries agro-processing and garment in the Amhara region, Ethiopia.
It was also confirmed that an employee hurts CSR implementation. This study is one of the few studies that assess the practical problems that large industries are facing in their business to CSR implementation in the context of Ethiopia. It also contributed to the theoretical and empirical literature of measure of CSR implementation based on empirical evidence from the developing country. Consider identified evidence of determinant factors, managers of agro-processing and garment Textile and leather industries take actions to improve CSR implementation.
Besides, policymakers should develop policies to improve the regulatory and institutional governance for CSR implementation of agro-processing and garment Textile and Leather industries. The limitation of this study shows the sample size was inadequate for separate analysis of agro-processing soft drinks, breweries and garment textile, leather industries.
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Abstract Abstract Currently, large industries like agro-processing and garment Textile and Leather industries in Ethiopia have interested to implement CSR activities. Introduction Corporate social responsibility CSR in Ethiopia has become an important aspect of managing industries like food processing, beverages, textiles, and leather.
Corporate social responsibility in agro-processing and garment industry in Ethiopia In Ethiopia, profit is the sole purpose of a business that would be achieved at any cost; employees are a resource to be exploited and industries are treating suppliers and customers unfairly Animaw, Stakeholder theory One of the theories of CSR is the stakeholder theory.
Empirical literature review and hypotheses development As pointed by Maimunah , the stakeholder approach has been developed as one of the strategies in improving the management of the firm. CSR and environment An industry activity could have some environmental impacts. Regarding the previous studies, the following hypothesis is developed: H 2 : The Environment has a positive effect on CSR activities of industries 4. CSR and customer Graafland, Eijffinger, and SmidJohan shared that CSR to customers should focus on safety and quality of the product, respect for customers, and supply of sustainable alternatives.
According to the prior literature, the following hypothesis will be tested: H 3 : Customer has a positive impact on CSR activities of industries 4. Hence, the current study proposes the following hypothesis: H 4 : Government has a positive impact on CSR activities of industries 4. Thus, this study states the following hypothesis: H 5 : Employees have a positive effect on the CSR activities of the industries 4.
Research design 5. Data and sample This research data was collected from primary sources. Method of data analysis For this study, to analyze the primarily collected data; frequencies, percentage, confirmatory factor analysis CFA and structural equation model SEM was used.
Empirical results and discussion 6. Preliminary analysis This paper addressed to what extent corporations are operating in the socially responsible way i. Table 2. Note : Values in main diagonal are the square root of average variance extracted; Values in off-diagonal are squared correlations.
Table 7. Summary and conclusion In this study, the determinant factors to the implementation of CSR practice in Agro-processing and garment Textile and leather industries of the Amhara region, Ethiopia have been identified, ranked, and discussed. Funding The authors received no direct funding for this research. References Abrehet, K. Corporate social responsibility in India. The Academy of Management Review Archive , 32 3 , — Do corporate social responsibility activities enhance customer satisfaction and customer loyalty?
Evidence from the Saudi banking sector. Case study in Ethiopian textile industry. Structural equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin , 3 , — Bahir Dar University. Bahir Dar tannery effluent characterization and its impact on the head of Blue Nile River. African Journal of Environmental Science and Technology , 8 6 , — Corporate social responsibility checklists. Investment Climate Survey. Washington: World Bank. Corporate associations and consumer product responses: The moderating role of corporate brand dominance.
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Journal of Business Ethics , 72, 1. University of Warwick, School of Law. Adoption of corporate social responsibility in the least developed countries-comparative case studies research in the Ethiopian brewery sector. A stakeholder perspective of corporate social responsibility. Promoting a European framework for CSR. Brussels: Commission of the European Communities. The stakeholder model refined. Journal of Business Ethics , 84, — Multi-item stakeholder based scale to measure CSR in the banking industry.
International Strategic Management Review , 2, 9— Ethiopia, Natural Resources and Conservation , 2 4 , 51— Evaluating structural equation models with unobservable variables and measurement errors. Journal of Marketing Research , 18, 39— Strategic management: A stakeholder approach. Boston, MA: Pitman. Stakeholder theory: A libertarian defense. Business Ethics Quarterly , 12 3 , — Stakeholders: Theory and practice. Oxford: Oxford University Press.
Capitalism and freedom. The social responsibility of business is to increase its profits. New York Times Magazine , 13, — C MA Thesis. Addis Ababa University. The relationship between corporate social responsibility and shareholder value: An empirical test of the risk management hypothesis. Strategic Management Journal , 30, — Benchmarking of corporate social responsibility: Methodological problems and robustness. Journal of Business Ethics , 53 1—2 , — Accountability and human rights: A tentative exploration and a commentary.
Critical Perspectives on Accounting , 22, — Not much had changed in those three first decades of the twentieth century. There are four phases of this expansion:. Era of the Dam and Cotton Factory: Bahir Dar in the Age of Socialism: Before the s, the Lake Tana basin history appears to be mostly rural. In this natural yet human history, what social roles did the material elements of the environment play: the lake itself, and the malaria that was asso- dated to its basin?
But the Blue Nile headwater hydrology was a dynamic, changing flow and there is also evidence that the lake dried up 15, and 16, years ago and became a papyrus swamp. There was, in geological time, a major change in lake ecology and biological habitat took place. Twenty-eight fish species inhabit the lake, twenty-one of which are endemic.
Only height fish species inhabit the river basin both above and below the falls. Fish and other aquatic organisms did not ascend the river to inhabit the lake. Yet, it is not the lake itself, but its seasonally flooded edges that form its malaria setting. These cultures traded places and bodies of knowledge on the local ecologies over time, resulting in a cereal- based agro-economy that supported livestock and small farms that managed them.
We can count among these: rinderpest, kalazar, yellow fever, tick and louse-based relapsing fever, and lower intestinal tract infections. More than canary in a coal mine, malaria was not a sign of a problem but was the problem itself.
In the longer-range past these were the drivers of where people in the watershed lived, and when they could move about. The disease and appearance of its vectors three types of anopheline mosquitoes marked seasonal change, almost as much as the rigors of the agricultural season, though in the higher areas malaria was an unstable marker of time. The southern edge of the lake was not a prime area for human settlement. In those settings malaria was the lead partner in the dance rather than just an opponent on the other side of the chessboard.
Monasteries and major church sites to the east and south—Debre Tabor, Debre Marcos, Martola Mariam, Dembecha, Burie Mikael dominated religious life, though Muslims had long plied the trade routes and small market centers. Once established after Bahir Dar town had always had a strong Islamic presence. Malaria did, however, spill onto the highlands once or twice a decade as best we can figure.
Malaria in particular was an unwelcome, but sometimes visitor to the highland zones where people lived, and a more permanent resident of the lowland where only people on political or ethnic margins dared to live. Malaria on the edges of the region was, to some along the edges of ecological zones, a regular part of life.
Water and nighttime temperatures during those times were different than more modern periods after the midth century. If Bruce tells us that in the s he saw snow on the top of the peak Ras Dashan, we should believe him; even if that snow that did not appear in the XX th century.
We might well read that as a sign of what International Committee on Climate Change calls glacial expansion [Pachauri and Reisinger et al. But what were the broader effects on health, politics, and the overall human condition in local settings in Ethiopia? We know few details of actual local climate conditions, but we can surmise that rising temperatures, especially at nighttime may have changed the geography of those disease transmissions, especially for malaria.
The Lake Tana basin was a rural hinterland to these changes, but not a seat of power. We know something about political change in the mids, we know next to nothing about the social or ecological life of disease or health in the Blue Nile watershed or the later site of Bahir Dar town in that period.
Travelers reported their fears of fever, but voices of the true status of economic change in the watershed were silent for decades. In this period the major source of economic and ecological stability at the local level was its grain-based ox-plow agricultural ecology. One local Ethiopian visitor—a loquacious traditional healer who was there during the malaria outbreak—offered poignant testimony.
This observer knew the local landscape and its history of disease and vegetative cover. The fevers caused misfortune in Foguera. It was plain, absolutely bare. At night, they did not stay in the hills; they descended on Foguera to feast on the dead cattle along the roads But this was a landscape that in two decades would emerge, tenuously, as fertile ground for economic development.
The reign of Haile Sellassie, the first one and even more the second one , is usually seen as the historical turn that gave shape to modern Ethiopia, in its political, but also economic and urban dimensions. Is it also the case for the Lake Tana region? The British idea of a Lake Tana dam emerged shortly after a Nile treaty signed in The following rise of commodity prices casts light on both the value of Nile waters for development, and the cost of losing control of them.
Yet, realities of infrastructure capacity also continued to isolate Lake Tana from regional and local political economies. Up to the Italian invasion, little had taken place to link Lake Tana to the nation or the world. The difficult Blue Nile gorge would not have a bridge until The rains even interrupted the single-line telephone connection that, in , reached only to Burie, a town kilometers south of the lake. Beyond infrastructure, Ras Tafari aka Haile Sellassie after faced political opposition from regional leaders who sought to be part of a financial agreement on a dam and wanted to keep their local autonomy from the distant new economic and political center in Addis Ababa.
In that era the Bahir Dar region was only a rural economy poorly service by health infrastructure or penetration by a national economy. In and again in , the area of the lake and its hinterlands suffered the devastating effects of a malaria outbreak. Tens of thousands of rural folk had died. Gazing out at the agrarian landscapes that surrounded newly burgeoning towns in the s, one could easily witness persistent practices that gave its fields and landscapes their visual character.
The future Bahir Dar urbanshed was yet to appear. With the first hydroelectric dam built in the early s, industrialization started to shape the regional physical landscape. What underlay a quiescent Tana watershed still were the annual rhythms of a rain pattern that set agricultural cycles.
This planned urban center, Bahir Dar, that linked the building of a textile factory, a smallish The modern bridge over the Blue Nile river leading to Addis Ababa came in There was no bridge on that old coffee-trading route until the early s. The local agricultural system, as it turns out, had become a part of this dance.
In this old farm landscape, maize plants were a minor partner: local, early maturing types germinated with the first rains that shed their pollen in the cool months of June and July when heavy rainfall washed pollen out of the fields, and the plants produced green ears in. August and September. The government of the Derg failed to build a socialist economy. However, the policies launched by Menguistu deeply transformed the production structures, the soil status and more broadly, the landscape of Ethiopian countryside.
How did it shape the Lake Tana basin and its hinterlands? The Watershed in the Era of Socialism: ].
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Welcome to Ezega Business Guide at Ezega. Addis Ababa, Ethiopia, Addis Ababa. Bole Rwanda, Addis Ababa. Addis Ababa, Addis Ababa. Urael, Buanbua tera, Addis Ababa. The kahenat clergy and balabbat communities were the most important. In addition, three groups of tenant-craftsman communities, tanners, Muslims weavers and the Weyto stone-mill grinders, lived on balabbat lands. Although all were economically interdependent, there was no intermarriage between the tenant communities or between them and the balabbat and kahenat.
In , Bahir Dar was occupied by the Italians, who gave it modern urban features. Abolishing communal family ownership of land, they instituted private ownership. Alienating the balabbats from their rist, the allocated land for administration, the army, an airstrip and port facilities.
New residential and commercial zones were demarcated. The physical and social appearance of Bahir Dar was considerably changed. New settlement patterns emerged: and Italian camp, a Muslim community and a Weyto quarter, while the tanners' quarter remained unaffected. Bahir Dar became a melting-pot of different people and cultures. In the commercial zone, different types of shops, tea-rooms, tailor shops, bars and restaurants run by Italians, Arabs, Somalis and Sudanese made their first appearance.
Ethiopian participation in this realm was insignificant. The Italians gave Bahir Dar political importance making it the administrative center of the Lake Tana southern territories. They also showed interest in the possibility of developing the Lake Tana and Blue Nile basic agriculturally and of exploiting their waters for hydroelectric power. In , the Ethiopian Government was reinstated. It made Bahir Dar a capital, first at a sub-district and then at a district level.
Various offices and public services were set up. In Bahir Dar was raised to the status of a municipality. In the early s, it was considered to be the best site selected for the construction of an alternative capital of Ethiopia. During the s and s, Bahir Dar grew rapidly, being the capital of the awrajja by the same name in the Gojjam province.
The central government developed it as a market and transportation center of the economic growth of Lake Tana and the Blue Nile basin. A comprehensive master plan, with the new zoning, was prepared by German experts. Its implementation changed completely the physical appearance of Bahir Dar, which grew as a center of industrial and economic development. It was provided with a water-supply, hydroelectric power, improved lake-port facilities, the Abbay bridge, textile mills, a hospital and institutions of higher education which now form Bahir Dar University.
In the s Bahir Dar experienced remarkable growth and expansion. It has become the capital of the Amhara National State. The country's free-market economic policy has encouraged investment and other market potentialities. Today Bahir Dar is not only a center of administration, but also a nucleus of commerce, industry, transport, communication, health, education and tourism.
Bahir Dar is located at the exit of the Abbay from Lake Tana at an altitude of 1, metres 5, ft above sea level. The city is located approximately km north-northwest of Addis Ababa. Bahir Dar has a borderline tropical savanna climate, very close to a subtropical highland climate.
Afternoon temperatures are very warm to hot year-round, and morning temperatures cool; however, the diurnal range is much larger in the largely cloudless dry season. As Philip Briggs notes, Bahir Dar "is not only one of the largest towns in Ethiopia, but also one of the fastest growing — the western outskirts have visibly expanded since the first edition of this guide was published in Amharic was spoken as a first language by The national census reported a total population for Bahir Dar of 96, in 20, households, of whom 45, were men and 50, women.
The three largest ethnic groups reported in the city were the Amhara In census