Organizational environment factors associated with corporate social responsibility: effects on communication and guanxi relationship between supervisors and subordinates in SMEs

Effective communication within an organization as part of CSR benchmarking factor that helps align employee expectations facilitates problem solving, builds cooperative relationships and channels employee efforts to achieve common goals. This paper seeks to determine how CSR benchmarking factors of the organizational environment (such as management style, organizational structure and workplace culture) affect the effectiveness of intra-organizational communication and to examine the moderating effect of supervisor – subordinate guanxi. Data for the study was collected using self-administered questionnaires from working respondents in Kuala Lumpur in Selangor State, Malaysia. This study found that a more participative management style, less formalized organizational structure of SMEs and a healthier workplace culture are positively related to intra-organizational communication effectiveness. It was also discovered that the supervisor – subordinate relationship known as guanxi, has a positive moderating effect on all three relationships between management style, organizational structure and workplace culture with intra-organizational communication effectiveness. This study concludes that an organization’s management attitude towards employee participation, formalization of structure and healthiness of culture play important roles in encouraging effective communication and close supervisor – subordinate guanxi and further promotes communication, in addition to the mentioned environmental conditions.