Factors Affecting Sustainable Development

Business Research Methods – BUS320

Student Name:
Salem Hamad Abdullah Alnuaimi
Student ID:
S201710012
Submitted to:
Beenish Shameem
Date:
Spring 2019
Table of Contents
Introduction ................................................................................................................................ 3
Literature Review....................................................................................................................... 4
Theoretical Framework .............................................................................................................. 5
Operational Definitions .......................................................................................................... 5
Theoretical Framework .......................................................................................................... 6
Research Objectives & Hypotheses ....................................................................................... 6
Methodology .............................................................................................................................. 7
Analysis and Results .................................................................................................................. 7
Descriptive analysis ............................................................................................................... 7
Univariate Analysis ................................................................................................................ 8
a) Test of mean ................................................................................................................ 8
b) Test of proportion ........................................................................................................ 8
Bivariate Analysis .................................................................................................................. 8
a) T- test – test for difference .......................................................................................... 8
b) Test for difference – ANOVA ..................................................................................... 9
Correlation ............................................................................................................................. 9
Discussion – Summary of Results ........................................................................................... 10
Conclusion, Recommendations and Future Research .............................................................. 11
References ................................................................................ Error! Bookmark not defined.
Introduction
Recently joining the nearest neighborhood restaurant as team, we have started as trainees where
the job doesn’t pay well. The reason to join this restaurant is that it has got the reputation of
“Pioneers of the Green Wave”. Recently, some interviewers from the leading research firm
interviewed the CEO of restaurant about the restaurant’s success at the environmental factors.
The CEO has told that initial reason to care about environment was the stakeholder pressure,
but later on it is more about the level of commitment to save the environment and training of
employees on ethical awareness. The team from the research organization has requested us to
team up with them and test the factors mentioned by the CEO and then compare the level of
achievements by this restaurant to the other competitors.
An article by (Abreua, Castrob, & Lazaroc, 2013) which surveyed 112 Brazilian companies to
inquire the effect of stakeholders on companies’ policies regarding the environmental
sustainability. The research hypothesized that stakeholders have positive influence on
environmental sustainability policies and practices. The research concludes that stakeholders
are one of the initial reasons for an organization to follow sustainable practices.
(Kumar & Rehman, 2015) Further adds that all the units of supply chain are equally
responsible for the sustainability of the final product. Buyer-supplier are significant players of
sustainability in the supply chain. An empirical research hypothesized that consistent employee
training has direct effect on firm’s performance in sustainable development of the organization.
The hypothesis was tested on companies in South and North China which turned out to be true
(ji, Huang, Liu, Zhu, & Cai, 2011). Following sustainable practices is considered a heavy
expense at organizations in many places, especially getting ISO 14000 EMS certification.
Although, it is more important to see how important management is to get the certification.
The most significant thing for sustainability of an organization is the commitment of top
management (Jayashree, Malarvizhi, Mayel, & Rasti, 2015).
The aim of the research is to find out the ways to measure the factors that are mentioned by the
CEO in the case and then identify the type of effect those factors have on the sustainable
development of any organization. To be exact, the aim of research is to figure out direction of
effect of the identified independent variables (Stakeholders pressure, employee training and
management’s commitment) on the dependent variable(sustainable development). As the
literature suggests that some organizations do not consider following the sustainable practices
due to various challenges, so this research is highly significant of the stand point that it will
guide about the exact factors to be focused on to achieve excellence in sustainable performance.
Literature Review
Sustainability development is one of the increasing trend in the market and lots of researches
are being made (Garces-Ayerbe, Rivera-Torres, & Murillo-Luna, 2012). A research that
studied the motivating factors of sustainability development in high tech companies in Taiwan
suggested that willingness of management is fairly motivating for sustainability development,
but more important factor is the internal resources which are capable of achieving the goals in
sustainable development (Law, 2009). Business ethics plays an important role in motivating
the firms to follow sustainable development. A research suggest a theoretical framework based
on business ethics to judge the management decisions in general and from sustainability point
of view. There is growing awareness of sustainable development and it has been found in the
research that the companies that do follow sustainable practices have negative impact on
environment which leads to the lower sales and revenue (Lashley, 2016). A report by ACCA
institute that states the benefits of sustainability for a business are; business improvement,
increased trust and brand reputation (Ching, 2013).
A research with the aim of studying the effects of internal stakeholder’s pressure on proactive
environmental strategies found that due to internal pressure the firm drives environmentally
friendly strategies voluntarily. On the other hand, the external pressure develops a legitimating
response and indirectly affects the environmental proactivity (Hyatt, 2014). A paper studied
the effects of stakeholder and institutional pressure on sustainable practices on gas industry as
a case study of Shale Gas tells that main influence on the eco-efficiency practices of the
company are derived by the internal stakeholder’s pressure, while the external stakeholder’s
play only the mediating role for the company which can be handled easily (Hauser, 2014). A
research that explains why the influence of internal stakeholder is more than the external
stakeholders tells that to follow sustainable practices in a firm the most important thing is the
allocation and use of resources which are controlled by the internal stakeholders. In some
industries the external stakeholders are more powerful than the internal stakeholders so the
effects are vice versa (Ingenbleek & Dentoni, 2016). A case of Nestle is explained in a paper
where the brand reputation of Nestle was targeted to be affected negatively by Greenpeace
named organization. The external stakeholder pressurized the firm to follow sustainable
practices in their supply chain management. By the threat of reputational damage the supply
chain management managers started to work on sustainable practices and figured out the
benefits of following environmental friendly practices which helped them reduce reputational
and stakeholder activist risk (Wolf, 2014).
An empirical research hypothesized that consistent employee training has direct effect on
firm’s performance in sustainable development of the organization. The hypothesis was tested
on companies in South and North China which turned out to be true (ji, Huang, Liu, Zhu, &
Cai, 2011). According to the study of another article, the result indicates that the study of the
environmental as well as ethical awareness should be integrated with the sustainability
development along with all its disciplines and also its influence on the sustainability
development is consistent (MEYER & NEL, 2015). Environmental ethics is composed of
several sub elements such as cognition, inspiration, criticism, adjusting as well as promoting
the environmental regulations. These implementation of the environmental ethics to the region
is what stimulates for the sustainable development (Du & Erfu, 2011).
It has been found in earlier researches that the stakeholder’s pressure is the main reason of the
sustainable practices that a firm follows, but there are other variables that do affect the
sustainable practices. Another most important factor for the firm to be sustainable is the ability
to be sustainable which is based on the resources and skills of employees. The research suggests
that commitment from the managers is also an essential element to make the firm sustainably
stable (Gattiker, Carter, Huang, & Tate, 2014). Emphasizing on the importance of social
responsibility a research paper that investigated 450 Swedish SMEs adds to the literature
review by telling us that most of SMEs follow CSR because of it’s market and entrepreneurial
advantages that make them more committed to the strategy (Jansson, Nilsson, Modig, & Vall,
2017). A research paper explaining the importance of CSR for the corporations tells that CSR
are the new demand of people from corporations. The research studied how the commitment
of employees and motivation of employees can be enhanced for CSR achievements. The
research suggests that the identification of employees should be linked as close to the
organizations as possible and employees working for better achievements in CSR should be
rewarded, so in this way their motivation and commitment can be enhanced (Caollier &
Esteban, 2007).

Theoretical Framework

Operational Definitions
Key Operational Definitions
Constructs
Stakeholder The pressure from stakeholders to follow sustainable practices
pressure
 Management’s The level of commitment from management of the organization to make
commitment the organization sustainably developed.
Training on The trainings given to the employees on the sustainable practices to make
ethical them aware
awareness
Sustainability The level of sustainability attained by the organization among all its
Development operations.

Theoretical Framework

Research Objectives & Hypotheses

Research Objective
The objective of the research is to identify the relationship between stakeholder pressure,
management’s commitment and training of employees on ethical awareness with sustainable
development.
Research Hypothesis
1. Higher stakeholder pressure leads to better sustainable development.
2. Higher management’s commitment leads to better sustainable development.
3. More training on ethical awareness for employees leads to better sustainable
development.
4. Stakeholder pressure is most effective variable to sustainable development.
5. Management’s commitment is most effective to sustainable development.
6. Ethical awareness for employees is most effective to sustainable development.
Methodology
It is an empirical research which lies between certain and uncertain results. It is based on trendy
research topic. The research used both the sources of information which are; primary
(Questionnaire) and secondary (Literature Review). Milestones of the research are as follows;
Proposal, Literature Review, Questionnaire, Collection of Data, Analysis of Data and Report
Drafting. Restaurants and hotels that are following sustainable practices were considered to be
the target population. Sample size is around 100 to keep the results significant. The sample was
chosen randomly and was surveyed with convenience. Data analysis was done after the
collected raw data was uploaded on Microsoft Excel to arranged and make it useful. Descriptive
statistics and regression analysis were used to identify the relations of variables. To keep the
quality of the research reliable, it was important to be ethical while conducting research.
Plagiarism and credit to the authors was the main point to be focused to stay ethical while
writing the literature review. Collected data was used and no fabrication of data was made to
be part of the research plan. Privacy of respondents was taken in to consideration as well.

Analysis and Results

Descriptive analysis
Table 1. Descriptive analysis
Organization Jimi Manaseer Total %
Organization 27 13 40 40%
Competitor 1 13 15 28 28%
Competitor 2 15 17 32 32%
Location
Jimi 55 Three organizations were

Manaseer 45 chosen for this study. One

organization and two of its
competitors were chosen that gave a total of 100 participants. Out of these 100 participants, the
main organization had a total of 40 participants out of which 67% were from Jimi and
remaining 26% were from Manaseer. The least number of participants were from competitor 1
who had 13 people from Jimi and remaining 15 from Manaseer.
Table 2: Data for analysis
Data
Sample 100
 Std Deviation 3.0
Mean Score 2.0
Sig. level 0.02
Proportion 70%

Univariate Analysis

a) Test of mean
Construct: Total Complaints
Hypothesis: = average total complaint between Manaseer and Jimi is 2.0
N = 100 S.D = 3 µ = 2.0 z =2.33
𝑠 𝑠
By using the equation: µ - Z µ+Z
√𝑛 √𝑛

1.301 2.699
Result: Reject Ho. The z value found was outside the acceptance region.
The difference between the assumed value (2.0) and the observed value (5.26) is statistically
significant. There is 2% chance that this is by error.

b) Test of proportion
Construct: Total complaints
Hypothesis: 70% in favor of customer complaint between Manaseer and Jimi
P = 0.92 Q = 0.30 Z = 2.33
𝑝.𝑞 𝑝.𝑞
By using the equation:𝜋 − 𝑍 √ 𝑛 𝜋+𝑍√𝑛

0.63 0.76
Result: Reject Ho. The difference between the hypothesized value 0.70 and the observed value
0.92 is statistically significant. There is 10% chance that this is due to chance or error

Bivariate Analysis

a) T- test – test for difference

Hypothesis:
o Ho: Customer complaint per month is same in Manaseer and Jimi
o H1: Customer complaint per month is not same in Manaseer and Jimi
Jimi Manaseer
 Mean 4.872727273 5.733333333
Variance 11.70572391 9.881818182
Observations 55 45
Hypothesized Mean Difference 0
df 97
t Stat -1.31
P(T<=t) one-tail 0.10
t Critical one-tail 2.08
P(T<=t) two-tail 0.19
t Critical two-tail 2.37

Results: Do not Reject Ho. The pvalue is higher than the alpha (0.02) and we are 98% sure that
there is no difference between complaints per month in Jimi and Manaseer

b) Test for difference – ANOVA

Hypothesis
o Ho: Employee training is same in organization, competitor 1 and competitor 2
o H1: Employee training is not same in organization, competitor 1 and competitor 2
ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 215.0641071 2 107.5321 0.584571 0.559296 4.074124
Within Groups 17843.17589 97 183.9503

Total 18058.24 99

Result: Do not reject Ho. The P value is greater than the alpha (0.02). There is a 98% chance
that there is no difference between organization, competitor 1 and competitor 2 with respect to
employee training.

Correlation
Test for association
Hypothesis: Is there a relation between employee training, stake holder pressure and
management commitment?
Stakeholder Management Employee
Pressure Commitment Training
Stakeholder Pressure 1
Management
Commitment 0.066617282 1
Employee Training 0.138174759 0.029650968 1

Result: There is a weak positive relationship between stakeholder pressure and management
commitment. Also, a weak positive relation is seen between stakeholder pressure and employee
training. As for management commitment and employee training a very weak positive relation
is seen inkling more on neutral.

Discussion – Summary of Results

Environmental sustainability has become quite crucial in the past few years. More and more
organizations are mobbing towards sustainability to give back to their customers and hold a
better position in the market. The analysis conducted has brought forward important results
that needs to be considered. Firstly, the number of complaints in Jimi and Manaseer were found
to be same. This shows that companies operating in these two areas have same number of
complaints from their customers. All the companies under study are experiencing the same
level of problems from their customers. When employee training was assessed in these
organizations, it was found that employee training is same in these organizations. This is could
be used to justify why all these companies experience the same number of complaints. The
theoretical model developed in the study considered factors such as employee training,
stakeholder pressure, and management commitment. We also looked at the relationship
between these variables and it was found that stakeholder pressure and employee training
showed a weak positive relationship. Whereas, stakeholder pressure and management
commitment showed much weak relationship. This means their combination couldn’t be
utilized together to generate better results at the organization. Moreover, through the multi
linear regression we saw that management commitment was found to be crucial which is
consistent with the findings of (Gattiker, Carter, Huang, & Tate, 2014). Additionally, the role
of stakeholders in driving businesses to sustainable operations was also seen to be important.
This finding was also seen in the study conducted by (Hyatt, 2014). Employee training was
seen to be least significant. This may be because despite training the employees, sustainable
actions can only be carried out with management commitment. If the top management doesn’t
employ the necessary policies and procedures for conducting sustainable operations, then it
wouldn’t impose any effect on the company.

Conclusion, Recommendations and Future Research

The impact of three factors namely employee training, management commitment and
stakeholder pressure was assessed in this study for environmental sustainability. The study was
carried out on a sample of 100 people from three different organizations. After a conducting
the analysis, the following conclusions were drawn:
 Employee training has less effect on environmental sustainability. This is because the
employees tend to follow the policies and procedures driven by the management. If the
management has loose policies, it cannot push employees to be more sustainable in the
carrying out operations
 Stakeholder pressure on carrying out sustainable practices is very important. If the
stakeholders don’t pressurize the companies to carry out sustainable initiatives, the
organizations become less interested too. Stakeholders are important assets to the
company; thus, their actions are highly influence by them.
 Management commitment is the second most important factor after stakeholder
pressure. Any initiative taken by the management requires utmost commitment to
transform it into sustainable. If the management doesn’t state out policies and
procedures for sustainable business practices, then the initiatives are most likely to fail.
The implications of this to the managers are significant. Managers can understand from this
research that training employees is not very important. Instead, they should develop more
commitment from their side to have environmental sustainability initiatives. Also, the role of
stakeholders is seen to be crucial for driving the business towards sustainability. Companies
can should select some of their stakeholders wisely who can direct the pressure on them when
required to generate best business practices. For further research work, we would suggest
looking in to other organizational factors that affect environmental sustainability. Moreover,
external factors such as the market environment, competitors’ strategies etc. can also be tested
using this model.

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