Moderating and mediating ethical sensitivity on the effect of corporate social responsibility on indonesia sme’s reputation

Setyabudi Indartono and Ratna Candra Sari

The small and medium enterprises (SMEs) reputation is believed to be supported by the corporate social responsibility (CSR) programs. It is believed that CSR activities are able to increase various advantages for SME’s. However most of SME’s owners tend to reject CSR activities as well as their perceptions of the load of financial responsibility. They are likely argued that their business has various limitations of resources which are needed to apply CSR programs. Accordingly, it is believed that different SME’s owner’s ethical sensitivity may bring over the effect of the CSR’s intentions on the SME’s reputation. However, few studies explore the effect of CSR’s intentions on the SME’s reputation based on various SME owners’ ethical sensitivity. This paper investigates the mediation and moderation effect of owner’s ethical sensitivity on the effect of CSR on SME’s. The result shows that ethical sensitivity partially mediates and moderates the effect of CSR on SME’s reputation. Managerial implication and suggestion for future research are discussed.

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