Article Sidebar

Download
Full Text PDF
Statistic
Read Counter : 433 Download : 412

Downloads

Download data is not yet available.

Main Article Content

Abstract

This study examines the effect of disclosure of labour social responsibility on the company's financial performance as measured by operational aspects (ROA), profitability aspects (ROE), and sales aspects (ROS). This study uses regression analysis to examine the relationship between labour social responsibility disclosure and financial performance of companies listed on the Indonesia Stock Exchange during 2015-2020 and indexed by GRI. The results of this study indicate that the disclosure of employment social responsibility has a significant effect on the achievement of financial performance aspects of operations (ROA) and financial performance aspects of sales (ROS), while if it is associated with the achievement of financial performance aspects of profitability (ROE), there is no significant effect on employee social responsibility disclosure. This research contributes to achieving sustainable development goals by providing views for companies regarding the impact of implementing and disclosing employment social responsibilities and contributing to literature related to labour, financial performance, and sustainability disclosure. This novel research provides groundbreaking insights into the impact of implementing and disclosing employment social responsibilities on financial performance, highlighting the importance of labor, financial performance, and sustainability disclosure in achieving sustainable development goals.

Keywords

Social responsibility disclosure labour financial performance governance

Article Details

License

Copyright (c) 2023 Jurnal Akuntansi dan Auditing Indonesia

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Authors who publish with this journal agree to the following terms:

  1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
  2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
  3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).

References

  1. Aggarwal, P. (2013). Impact of sustainability performance of company on its financial performance: a study of listed Indian companies. Global Journal of Management and Business Research, 13(11), 61-69.
  2. Agung, K. V. & Damayanti, N. A. (2020). Factor affecting employee satisfaction at Surabaya Private Hospital. EurAsian Journal of BioSciences, 14, 2881-2885.
  3. Alareeni, B. A. & Hamdan, A. (2020). ESG impact on performance of US S&P 500-listed firms. Corporate Governance, 20(7), 1409-1428. https://doi.org/10.1108/CG-06-2020-0258
  4. Anokhin S. A., Spitsin, V., Akerman E., & Todd Morgan (2021). Technological leadership and firm performance in Russian industries during crisis. Journal of Business Venturing Insight, 15(2021), 1-11. https://doi.org/10.1016/j.jbvi.2021.e00223
  5. Asiamah F. N & Ghulam S. (2019). The relationship between CSR activity and sales growth in the UK retailing sector. Social Responsibility Journal, 16(3), 387-401. https://doi.org/10.1108/SRJ-09-2018-0245
  6. Babbie, E. (2010). The practice of social Research (12 th ed.). Wadsworth: Cengange Learning.
  7. Bacha, S. & Ajina, A. (2019). CSR performance and annual report readability: evidence from France. Corporate Governance: The International Journal of Business in Society, 20(2), 201-215. https://doi.org/10.1108/CG-02-2019-0060
  8. Berman, S.L., Wicks, A.C., Kotha, S., & Jones, T.M. (1999). Does stakeholder orientation matter? The relationship between stakeholder management models and firm financial performance. Academy of Management Journal, Vol. 42(5), 488-506.
  9. Blustein D. L., Perera H., Diamonti, A. J., Gutowski, E., Meerkins, T., Davila A., Erby, W., & Konowitz, L. (2020). The uncertain state of work in the U.S.: Profiles of decent work and precarious work. Journal of Vacational Behavior, 122(2020), 103481. https://psycnet.apa.org/doi/10.1016/j.jvb.2020.103481
  10. Bhodanwala, S. & Bhodanwala, R. (2018). Does corporate sustainability impact firm profitability? Evidence from India. Management Decision, 56(8), 1734-1747.
  11. Boubaker, S., Cellier, A., Manita, R., & Saeed A. (2020). Does corpoarate social responsibility reduce financial distress risk? Economic Modelling, 19(2020), 835-851. https://doi.org/10.1016/j.econmod.2020.05.012
  12. Cahaya, F. R., Nursalim, N., & Dhirathiti, N. (2023). Expectations on labour-related CSR reporting: voices from labour unions in Indonesia and Thailand. Social and Environmental Accountability Journal, 43(3), 235-258. https://doi.org/10.1080/0969160X.2023.2167847
  13. Cahaya, F. R., Porter, S., Tower, G., & Brown, A. (2015). The Indonesian Government’s coercive pressure on labour disclosures: Conflicting interests or government ambivalence? Sustainability Accounting, Management and Policy Journal, 6(4), 475–497. https://doi.org/10.1108/SAMPJ-09-2014-0051
  14. Christ, K. L., Rao, K. K., & Burritt, R. L. (2019). Accounting for modern slavery: an analysis of Australian listed company disclosures. Accounting, Auditing and Accountability Journal, 32(3), 836–865. https://doi.org/10.1108/AAAJ-11-2017-3242
  15. Chouabi, S. & Chouibi J. (2020). ESG and corporate financial performance: the mediating role of green innovation: UK common law versus Germany civil law. EuroMed Journal of Business, 17(1), 46-71.
  16. Dhaliwal, D.S., Radhakrishnan, S., Tsang, A. & Yang, Y.G. (2012). Nonfinancial disclosure and analyst forecast accuracy: International evidence on corporate social responsibility disclosure. The Accounting Review, 87(3), 723-759. https://doi.org/10.2308/accr-10218
  17. Famiyeh, S. (2017). corporate social responsibility and firm’s performance: empirical evidence. Social Responsibility Journal, 13(2), 390-406. https://doi.org/10.1108/SRJ-04-2016-0049
  18. Fitriani N. (2021). Kepemilikan keluarga, koneksi politik, dan risiko kesulitan keuangan. Unpublished dissertation, Airlangga University.
  19. Flugum, R., Harper, J., Sun, Li (2020). Employee performance and corporate cash holding. International Journal of Managerial Finance, 17(1), 97-117. https://doi.org/10.1108/IJMF-08-2019-0280
  20. Ghosh, A. (2013). Corporate sustainability and corporate financial performance: the Indian context. Indian Institute of Management Calcutta: Working Paper Series, 72, 1-37.
  21. Hadro, D., Fijalkowska J., Zygadlo K. D., Zumente, I., & Mjakuskina, S. (2021). What do stakeholders in the construction industry look for in non-financial disclosure and what do they get?. Meditary Accounting Research. 30(3), 762-785. https://doi.org/10.1108/MEDAR-11-2020-1093
  22. Han, J.J., Kim, H.J., & Yu, J. (2016). Empirical study on relationship between corporate social responsibility and financial performance in Korea. Asian Journal of Sustainability and Social Responsibility, 1(1), 61-76.
  23. Harymawan, I., Nasih, M., Ratri, M. C., John Nowland (2019). CEO busyness and firm performance: evidence from Indonesia. Heliyon, 5(2019), 1-9. https://ssrn.com/abstract=3561994
  24. Harymawan, I., Nasih, M., Salsabilla A., & Putra, F. K. G. (2020). External assurance on sustainability report disclosure and firm value: evidence from Indonesia And Malaysia. Entrepreneurship And Sustainability Issues, 7(3), 1500-1512. https://doi.org/10.9770/jesi.2020.7.3(5)
  25. Hery (2016). Akuntansi Dasar. Jakarta: PT. Grasindo.
  26. Horisch J., Schaltegger S., & Edward R. (2020). Integrating stakeholder theory and sustainability accounting: A conceptual synthesis. Journal of Cleaner Production, 275(2020), 124097. https://doi.org/10.1016/j.jclepro.2020.124097
  27. Jalal, M. P. & Shoar S. (2019). A hybrid framework to model factors affecting construction labour productivity. Journal of Financial Management of Property and Construction, 24(3), 385-409.
  28. Kalra A., Agnihotri, R., Talwar, S., & Rostami, A., & Dwivedi, P. K. (2020). Effect of internal competitive work environment on working smart and emotional exhaustion: the moderating role of time management. Journal of Business & Industrial Marketing, 36(2), 269-280.
  29. Kasmir (2016). Analisis Laporan Keuangan. Jakarta: Raja Grafindo Persada
  30. Khan, Safi U. (2021). Financing constraints and firm-level responses to the COVID-19 pandemic: International Evidence. Research in International Business and Finance, 59(2022), 101545. https://doi.org/10.1016/j.ribaf.2021.101545
  31. Kim, J., Chung, S., & Park, C. (2013). Corporate Social Responsibility and Financial Performance: The impact of the MCSI ESG Ratings on Korean Firms. Journal of the Korea Academia-Industrial cooperation Society, 14(11), 5586-5593.
  32. Koys, D.J. (2001). The effects of employee satisfaction, organizational citizenship behavior, and turnover on organizational effectiveness: a unit-level, longitudinal study. Personnel Psychology, 54(1), 101-114.
  33. Kuzey, C., Uyar, A., Nizaeva, M., & Absullah S. Karaman (2021). CSR performance and firm performance in the tourism, healthcare, and financial sectors: Do metrics and CSR committees matter?. Journal of Cleaner Production, 319(2021), 128802. https://doi.org/10.1016/j.jclepro.2021.128802
  34. Lange, D. & Bundy, J. (2018). The association between ethics and stakeholder theory, sustainability, stakeholder governance, and corporate social responsibility. Emerald Publishing Limited, 38, 365-387. https://doi.org/10.1108/S0742-332220180000038019
  35. Lee, C. & Cheng, P. (2018). Effect of the critical human resource attributes on operating performance. Chinese Management Studies, 12(2), 407-432. https://doi.org/10.1108/CMS-10-2017-0296
  36. Lee, L.T.-S. and Sukoco, B.M. (2007). The Effects of Entrepreneurial Orientation and Knowledge Management Capability on Organizational Effectiveness in Taiwan: The Moderating Role of Social Capital. International Journal of Management, 24(3), 549- 572.
  37. Mahrani, M. & Soewarno, N. (2018). The effect of good corporate governance mechanism and corporate social responsibility on financial performance with earnings management as mediating variable. Asian Journal of Accounting Research, 3(1), 41-60.
  38. Maji, S. G. (2022). Disclosure pattern of labour practices and decent work and its impact on corporate financial performance: evidence from Asia. Global Business Review, 23(4), 1054–1070. https://doi.org/10.1177/0972150919876523
  39. Marques-Mendes, A. & Santos, M.J. (2016). Strategic CSR: an integrative model for analysis. Social Responsibility Journal, 12(2), 363-381. https://doi.org/10.1108/SRJ-04-2015-0055
  40. McWilliams, A. & Siegel, D. (2001). Corporate social responsibility: a theory of the firm perspective. The Academy of Management Review, 26(1), 117-127. https://doi.org/10.2307/259398
  41. Moeheriono. (2010). Pengukuran kinerja berbasis kompetensi. Surabaya: Ghalia Indonesia.
  42. Mowday, R.T. & Steers, R.M. & Porter, L.W. (1979). The measurement of organizational commitment. Journal of Vocational Behavior, 4(2), 224-247. https://doi.org/10.1016/0001-8791(79)90072-1
  43. Musianto. L. S. (2002). Perbedaan pendekatan kuantitatif dengan pendekatan kualitatif dalam metode penelitian. Jurnal Manajemen dan Kewirausahaan. 4(2), 123–136.
  44. Olabosipo F., Ayodeji O., & James, O. (2011). Factors affecting the performance of labour in nogerian construction site. Mediterranean Journal of Social Sciences, 2(2), 251-257.
  45. Organisation for Economic Co-Operation & Development (OECD) (2004). OECD principles of corporate governance, corporate governance in japan: from the viewpoints of management. accounting, and the Market. https://doi.org/10.1007/978-4-431-30920-8_10
  46. Fahad, P & Busru, A. (2020). CSR disclosure and firm performance: evidence from an emerging market. Corporate Governance, 21(4), 553-568.
  47. Parmar, B.L., Freeman, R.E., Harrison, J.S., Wicks, A.C., Purnell, L. & De Colle, S. (2010). Stakeholder theory: the state of the art. The Academy of Management Annals, 4(1), 403- 445.
  48. Parsa, S., Roper, I., Camen, M. M., Szigetvari, E. (2018). Have labour and human rights disclosures enhanced corporate accountability? The case of the GRI framework. Accounting Forum, 42(1), 47-64. https://doi.org/10.1016/j.accfor.2018.01.001
  49. Pfeffer, J. (1994). Competitive advantage through people. California Management Review, 36(2) 9-28.
  50. Porter, M. & Kramer, M. (2011). Creating shared value. Harvard Business Review, 89(1/2), 62-77.
  51. Qiu, Y., Shaukat, A. & Tharyan, R. (2014). Environmental and social disclosure: Link with corporate financial performance. The British Accounting Review, 48, 102-116.
  52. Ratri, M. C., Harymawan, I., Kamarudin K. A. (2021). Busyness, tenure, meeting frequency of the ceos, and corporate sosial responsibility disclosure. Sustainability, 13(10), 5567. https://doi.org/10.3390/su13105567
  53. Reifman, A., & Keyton, K. (2010). Winsorize. Encyclopedia of Research Design, 3, 1636– 1638.
  54. Rinawijayanti, E. D., Huang, X., & As-Saber, S. (2021). Adopting management control system through CSR strategic integration and investigating its impact on company performance: evidence from Indonesia. Corporate Governance, 21(3), 463-478.
  55. Rivera, J.M., Muñoz, M.J. & Moneva, J.M. (2017). Revisiting the relationship between corporate stakeholder commitment and social and financial performance. Sustainable Development, 25(6), 482-494. https://doi.org/10.1002/sd.1664
  56. Shoar S. & Banaitis A (2018). Application of fuzzy fault tree analysis to identify factors influencing construction labor productivity: a high-rise building case study. Journal of Civil Engineering and Management, 25(1), 41-52.
  57. Singh, A. & Chakraborty, M. (2021). Does CSR disclosure influence financial performance of firms? Evidence from an emerging market. Sustainability Accounting, Management and Policy Journal, 12(4), 788-810.
  58. Un.org (2016). Promote inclusive and sustainable economic growth, employment and decent work for all. Retrieved December 12, 2023, from: https://www.un.org/sustainabledevelopment/economic-growth/
  59. Vankatesan, M. & Luongo, G. (2019). Economic growth. sdg8 – sustainable economic growth and decent work for all (concise guides to the united nations sustainable development goals), Emerald Publishing Limited, August 2019, 1-3. https://doi.org/10.1108/978-1-78973-091-320191004
  60. Virakul B., Koonmee K., & McLean Gary (2009). CSR activities in award-winning thai companies. Social Responsibility Journal, 5(2), 178-199.
  61. Yoon, B., Chung, Y. (2018). The effects of corporate social responsibility on firm performance: a stakeholder approach. Journal of Hospitaly and Tourism Management, 37, 89–96.
  62. Zingales L. (2000). In search of new foundations. The Journal of Finance, 14(4), 1623-1654. https://doi.org/10.1111/0022-1082.00262
  63. Zhang, J., Djajadikerta, H. G. & Trireksani, T. (2019). Corporate sustainability disclosure’s importance in China: financial analysts’ perception. Social Responsibility Journal, 16(8), 1169-1189. https://doi.org/10.1108/SRJ-10-2018-0272