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.


Introduction
In today's highly competitive and dynamic business environment, effective communication is crucial for an organization's survival and success.It is easy to comprehend why effective intra-organizational communication is important as part of corporate social responsibility -CSR benchmarking.It allows employees to exchange opinions, learn from each other, organize tasks as well as establish and maintain productive working relationships (Robson, Skarmeas and Spyropoulou, 2006).Other studies also found that effective intra-organizational communication is positively linked to employee engagement, performance, commitment, productivity and satisfaction (Allen, 1992;De Ridder, 2004;Ng et al., 2006).Many CSR communication factors can get in the way of effective communication.Barriers to CSR communication are generally divided into environmental and personal factors.Environmental barriers relate to the characteristics and environmental settings of an organization, while personal barriers arise from differences in individual personalities and how they interact with others (Guo and Sanchez, 2009).Such barriers hamper effective communication by hindering, disrupting or distorting the flow and content of messages from the sender to the receiver.While there are many studies focusing on how individual characteristics influence effective communication, papers dedicated to understanding how organizational environmental factors impact intra-organizational communication effectiveness are few and far between.Therefore, this study aims to investigate the relationship between the CSR benchmarking factors of the organizational environment (management style, organizational structure, and workplace culture) and intra-organizational communication effectiveness.At the same time, there is no research on how supervisor -subordinate guanxi moderates the relationship between organizational environmental factors and communication effectiveness.Guanxi describes the informal and personal relationship between two or more individuals, built on the basis of shared institutions (Chen and Chen, 2004).Guanxi is important in institutions where authority is centralized and in particularistic organizations characterized by the lack of rules and enforcement of regulations through CSR benchmarking (Smith et al., 2012;Zhang, Li and Harris, 2015).In such circumstances, employees are motivated to form close relationships with their supervisors for career advancement and protection.Given the findings from contextual studies and the impact of supervisor -subordinate guanxi on a number of communicative outcomes such as open-minded dialogue (Chen and Tjosvold, 2007), increased participation (Chen and Tjosvold, 2007), frequent use of informal communication channels (Bian, 2006) and collective problem solving (Hwang, 1997), this study also seeks to examine the moderating effect of supervisorsubordinate guanxi, which is an element of the CSR benchmarking scorecard.Given that employees and managers spend a lot of their time communicating and considering the negative implications that ineffective communication can have on organizations, this paper seeks to answer the following questions: • What is the relationship between management style and intra-organizational communication effectiveness?
• What is the relationship between organizational structure and intra-organizational communication effectiveness?
• What is the relationship between workplace culture and intra-organizational communication effectiveness?
• Does supervisor -subordinate guanxi moderate the relationship between identified organizational environmental factors and intra-organizational communication effectiveness?The significance of this study is two-fold.Academically, this paper seeks to fill the research gap and expand the body of knowledge on CSR intra-organizational communication by investigating the relationship between organizational environmental factors (management style, organizational structure and workplace culture) and intra-organizational communication effectiveness, as well as to examine the moderating effect of supervisorsubordinate guanxi.From a management point-of-view, this study provides valuable insights to help managers craft environments and relationships conducive to effective communication.

CSR and effective intra-organizational communication
There are numerous definitions of communication published in various communication-related literatures by scholars interested in describing, understanding and predicting communicational phenomena.Some scholars define communication narrowly in terms of verbal exchanges (Hoben, 1954), uncertainty reduction (Barnlund, 1962), connection (Ruesch, 1957) and intention (Miller, 1966); but communication is evidently more than that.In the context of this study, communication is defined as the process of information exchange between two or more parties to transmit or receive the intended messages through the use of common languages and signs ( ).
An element of CSR such as intra-organizational communication refers to the formal and informal communication within an organization that can flow upward, downward, horizontally or diagonally through various communication channels (Guo and Sanchez, 2009).The two main objectives of intra-organizational communication are to inform employees about company policies and work expectations as well as to build a close-knitted community within the firm (De Ridder, 2004).Although employees spend bulk of their time communicating, not all exchanges result in a meaningful, that is, an effective and efficient communication.
Effective communication is achieved when a message from the sender is decoded and accurately understood at the receiving end (Scott, 2005;Fielding, 2006).
A growing number of studies have shown that effective intra-organizational communication produces numerous benefits for the organization.It supports social interactions and fosters relationship-building between members at different levels of the organization (Kalla, 2005), thus improving trust and rapport between subordinates and managers (Gavin and Mayer, 2005;Jo and Shim, 2005).Transparent and open communication encourages employees to share intellectual and creative ideas to create value for the organization (Quirke, 2008) and increases their sense of belongingness and self-worth (Smidts, Pruyn and Van Riel, 2001).Other studies also found effective communication positively linked to employee engagement, performance, commitment, retention, productivity and satisfaction (Allen, 1992;De Ridder, 2004;Ng et al., 2006).Workplace culture: Workplace culture refers to the system of shared beliefs, attitudes, values and assumptions governing behaviours of people in an organization (Fielding, 2006), developed overtime in response to environmental problems and brought in by internal cohesion (Zait, 2002).It is described as the foreground and background of an organization's communication system (Keyton, 2011).

CSR and environmental barriers
Communicative phenomena in organizations are manifestations of complex configurations of deeply felt attitudes, beliefs and values (Brown and Starkey, 1994).The common, unwritten understanding of what constitute acceptable and unacceptable behaviours helps condition employees' attitudes towards communication.Employees adjust their behaviours according to the norm in the organization -if the workplace culture is not conducive to constructive criticism, employees will stop providing such feedbacks over time (Carrison, 2010).While managers may not actively suppress upward communication, the absence of encouragement for employees to voice dissent or relay bad news can also keep important development under wraps (Bielaszka-DuVernay, 2007).Brown and Starkey (1994) found that communication tends to be enhanced with an internally cooperative (rather than competitive), informal, caring and participative workplace culture.

Elements of CSR in supervisorsubordinate guanxi
Originating from the Chinese culture, guanxi describes the informal and personal relationship between two or more individuals, built on the basis of shared institutions and motivated by mutual interests (Chen and Chen, 2004).Empirical studies reveal that supervisorsubordinate guanxi is related to important organizational outcomes.supervisor -subordinate guanxi is related to increased employee attachment with supervisor (Chen et al., 2009), trust in leader (Tsui and Farh, 1997), reduced turnover intention (Wong et al., 2003) and higher organizational commitment (Farh et al., 1998).In terms of communication, strong supervisorsubordinate guanxi is found to encourage employee participation (Chen and Tjosvold, 2007), frequent interpersonal interactions, use of informal communication channels (Bian, 2006), open-minded dialogue (Chen and Tjosvold, 2007) and problem solving (Hwang, 1997).
Contextual studies reveal that guanxi is crucial in transitional societies and institutions where decisions are made by a handful that have the power to punish and reward as they see fit (Smith et al., 2012).Guanxi is also found to facilitate particularistic (flexible, situational) rather than universalistic (rigid, standard) organizational practices, where managers have more latitude in making decisions due to the absence of rules and enforcement of regulations (Zhang, Li and Harris, 2015).In such situations, employees are motivated to form close relationships with those in power to seek career advancement and job security (Zhang, Li and Harris, 2015).

Research framework and hypotheses
This paper seeks to examine how organizational environmental factors such as management style (management attitude towards employee participation in decision making), organizational structure (formalization) and workplace culture (healthiness) influence intra-organizational communication effectiveness.The moderating effect of supervisor -subordinate guanxi is also studied.The research framework is presented in Figure 1.H1: Management attitude with a higher degree of employee participation in decision making results in more effective intra-organizational communication and the relationship is significant.

H2: A low degree of formalization is positively related to intra-organizational communication effectiveness and the relationship is significant. H3:
The healthier the workplace culture, the higher the intra-organizational communication effectiveness and the relationship is significant.

H4: Supervisor -subordinate guanxi moderates the relationship between management attitude towards employee participation in decision making and intra-organizational communication effectiveness.
H5: Supervisor -subordinate guanxi moderates the relationship between formalization of structure and intra-organizational communication effectiveness.
H6: Supervisor -subordinate guanxi moderates the relationship between healthiness of culture and intra-organizational communication effectiveness.

Sampling, questionnaire design and data collection
Convenience sampling is used due to the ease of execution, speed as well as cost effectiveness.To collect data, questionnaires were distributed both in hardcopies and online via Google Form.The questionnaire is divided into two sections: • Section A collects information about respondents such as gender, age, ethnicity, job level, industry, company size and organization ownership using nominal and ordinal scales; • Section B collects information about independent, moderator and dependent variables using interval scales where a series of statements are provided and respondents choose their answers from 5-point Likert scales (from "1= Strongly disagree" to "5 = Strongly agree").
Out of 200 hardcopy questionnaires distributed, 156 were completed and returned, translating to a response rate of 78%.Meanwhile, online questionnaires generated 118 completed responses, bringing the total number of completed questionnaires to 274.

Data Analysis Techniques
Prior to performing the analysis, the data set has been screened and cleansed from errors.Two sets of responses were removed due to being flagged as outliers, leaving 272 sets of responses available for data analysis.Scores for negatively worded items have also been reversed.Various data analysis techniques are used including descriptive statistics (frequency), reliability test (Cronbach's alpha coefficient), normality test (Skewness and Kurtosis), correlation analysis (Pearson correlation coefficient) and multiple regression.

Respondent profile
In total, there are 272 respondents for this study, out of which, as it can be noted from

Reliability test
There are many dimensions to measure the reliability of an instrument -stability, test-retest reliability, parallel-form reliability, internal consistency and so on.In this study, the Cronbach's alpha coefficient (α) is used to measure internal consistency of scales as a measure of reliability.
Internal consistency indicates the extent to which items in a scale tap the same construct.As a rule of thumb, the Cronbach's alpha coefficient of a scale should be above 0.7 (DeVellis, 2012).

Correlation analysis
Correlation analysis is used to study the strength and direction of association between two variables.Pearson correlation coefficient (r) is most commonly used to measure correlation and can take on values from -1 to +1.A positive sign indicates that there is a positive correlation (when one variable increases, so does the other) while a negative sign indicates a negative correlation (when one variable increases, the other decreases).Meanwhile, the strength of relationship is indicated by the absolute size of the value.Cohen (1988) suggests the following guideline to interpret the strength of relationship: r = 0.1 to 0.29 (low correlation), r = 0.3 to 0.49 (medium correlation) and r = 0.5 to 0.99 (strong correlation).

Hypothesis testing
Multiple regression is used to investigate the relationship between independent and dependent variables, as well as to check the effect of the moderator variable.For hypothesis testing, the first step is to examine the relationship between the individual independent and the dependent variables (H1, H2 and H3).Then, the moderator variable is added to determine if it moderates the relationship between the independent and dependent variables (H4, H5 and H6).

Organizational environment factors associated with corporate social responsibility: effects on communication and guanxi relationship between supervisors and subordinates in SMEs
No. 9(141)/2016 1033 H1: Management attitude with a higher degree of employee participation in decision making results in more effective intra-organizational communication and the relationship is significant.
There is a strong positive correlation between management style (management attitude towards employee participation in decision making) and intra-organizational communication effectiveness (r = 0.726).Table 5-1 (Model 1) shows the regression results between management style and intra-organizational communication effectiveness.
With an adjusted R² value of 0.526, the variable explains 52.6% of variance in intra-organizational communication effectiveness.Results show that management style makes a significant contribution to the prediction of intra-organizational communication effectiveness (β = 0.726, p = 0.000).Therefore, hypothesis 1 is supported.

H2: A low degree of formalization is positively related to intra-organizational communication effectiveness and the relationship is significant.
There is a strong positive correlation between organizational structure (formalization of structure) and intra-organizational communication effectiveness (r = 0.676).As presented in Table 5-2 (Model 1), with an adjusted R² value of 0.456, the variable explains 45.6% of variability in intra-organizational communication effectiveness.Results show that organizational structure makes a significant contribution in predicting intra-organizational communication effectiveness (β = 0.676, p = 0.000).Therefore, hypothesis 2 is supported.

H3:
The healthier the workplace culture, the higher the intra-organizational communication effectiveness and the relationship is significant.
There is a strong positive correlation between workplace culture (healthiness of culture) and intra-organizational communication effectiveness (r = 0.793).As presented in Table 5-3 (Model 1), with an adjusted R² value of 0.628, the variable predicts 62.8% of variance in intra-organizational communication effectiveness.Workplace culture also makes a significant contribution to the prediction of intra-organizational communication effectiveness (β = 0.793, p = 0.000).Therefore, hypothesis 3 is supported.

H5: Supervisor -subordinate guanxi moderates the relationship between formalization of structure and intra-organizational communication effectiveness.
As presented in Table 5-2, Model 1, the adjusted R² value is 0.456 (F = 227.808,p = 0.000).When supervisor -subordinate guanxi is added, the total variance explained increases to 71.6% (F = 342.376,p = 0.000), explaining an additional 26% of variance in communication effectiveness, after controlling for organizational structure (R² change = 0.260, F change = 248.294,p = 0.000).This shows that supervisor -subordinate guanxi has a moderating effect and hypothesis 5 is accepted.

Discussion of results
The first research question is to examine the relationship between management style and intra-organizational communication effectiveness.Results from statistical analysis show that management style with a higher degree of employee participation in decision making is positively related to intra-organizational communication effectiveness.This is consistent with the findings of Tourish and Robson (2006), Denning (2008), Arklan (2011) and Jensen (2014).This is expected as democratic managers treat employees as capable counterparts, actively seek their inputs for important matters and incorporate employees' suggestions when making decisions.On the other hand, a non-participative approach tends to create a suppressive environment which emphasizes top-down communication, discourages employee feedbacks and restricts the sharing of timely and important information.
The second research question is to find out the relationship between organizational structure and intra-organizational communication effectiveness.In line with earlier studies, a lower degree of formalization results in higher intra-organizational communication effectiveness as the flexibility enables information to be transmitted to relevant parties more directly, minimizing information distortion and loss.This is supported by Hage, Aiken and Marrett (1971) and Guo and Sanchez (2009).Although a higher degree of formalization helps segregate tasks and responsibilities more clearly, it creates a rigid structure where departure from established chain-of-command for communication is discouraged (even during critical times) and employees are constantly monitored to ensure rule observation.Escalation and handling of issues also take a longer time in formalized organizations due to the presence of hierarchical communication blockages.As a result, information is delayed and distorted as communication is forced through more levels (impacting communication effectiveness).
The third research question is to study the relationship between workplace culture and intra-organizational communication effectiveness.A healthier workplace culture (transparent and cooperative) is found to be positively related to communication effectiveness.This is similar to the findings of Brown and Starkey (1994), Bielaszka-DuVernay (2007) and Carrison (2010).In a cooperative environment, employees view each other as valued and trusted members of the organization and work hand-in-hand to achieve organizational goals.
Communication is likely to be more frank, open and well-intended when people work well together and share trusting relationships.On the other hand, in an unhealthy working culture characterized by competition to outperform one another, lack of trust and negative reactions to constructive feedbacks; people keep important information to themselves and refrain from highlighting problems unless necessary.These behaviours impede effective communication and result in delayed problem identification and solving.
The fourth research question aims to determine whether supervisor -subordinate guanxi has any moderating effect on the relationship between identified organizational environmental factors and intra-organizational communication effectiveness.
Results show that close supervisor -subordinate guanxi is found to have a positive moderating effect on all three relationships between (i) management style and communication effectiveness, (ii) organizational structure and communication effectiveness and (iii) workplace culture and communication effectiveness.The addition of supervisor -subordinate guanxi in all three instances results in higher explanation of variance in intra-organizational communication effectiveness compared to the independent variables alone.With close supervisor -subordinate guanxi, communication is reported to be of higher frequency, multi-directionality and enhanced quality.This can be explained by findings from past studies on social exchanges that higher quality supervisor -subordinate relationship is positively related to affiliation-oriented behaviours directed towards increasing smooth organization functioning, such as assisting co-workers, collective problem solving and facilitating communication (Whiting, Podsakoff and Pierce, 2008;Zhang, Li and Harris, 2015).

Theoretical implications
This study makes two major contributions to the existing literature.Firstly, it helps to extend the organizational communication literature by consolidating major organizational environmental factors (such as management style, organizational structure and workplace culture) and examines their impact on intra-organizational communication effectiveness (there is no such undertaking in past studies

Practical implications
The importance of effective intra-organizational communication cannot be overemphasized.This constitutes a holistic approach in addressing it instead of solely making changes to the organization's environment and hoping that communication effectiveness will improve tremendously overnight.Efforts involving significant structural and cultural changes are bound to face resistance and therefore, patience, perseverance, incentive systems and leaders' manifestation of desired behaviours are crucial in successfully bringing about the required change to improve communication effectiveness.
On top of any environmental condition, close personal relationship motivates supervisors and subordinates to engage more frequently in conversations.While changing an organization's structure and culture may take a long time, establishing good supervisorsubordinate guanxi can be achieved in a much shorter time span.Managers and employees should not restrict interactions solely to work but also express interest in each other's non-work life such as family, hobby and health.This way, both parties are likely to feel more emotionally connected, trust each other, have a sense of reciprocity and obligation, and are more willing to engage in open communication.However, managers should take care not to be too invasive in establishing good guanxi that employees perceived it as a violation of privacy and ensure the loyalty of both parties remain with the organization and not use guanxi for personal gains.

Limitations and recommendations for future research
This study has a number of limitations.Firstly, it has a relatively small sample size and respondents are mostly from the central region (Kuala Lumpur and Selangor).The small sample size limits the representativeness of responses to a larger population.The fact that respondents come mostly from the Central region further restricts its generalizability as the demographics and experiences of people in Kuala Lumpur and Selangor may differ from those in other regions.Future studies should take note to have a larger sample size and collect information from different regions to improve the generalizability of findings.
Questionnaires are self-administered and rely on respondents' understanding for interpretation.There is a possibility that respondents could misinterpret some of the statements in the questionnaire which could lead to bias responses.In the future, this can be reduced by allocating more time to conduct surveys so that the researcher can explain items in the questionnaire in more details to respondents.Making the questionnaire available in different languages such as Bahasa Malaysia, Chinese and Tamil could also help to minimize the risk of misinterpretation.
This paper may not be all encompassing and may have omitted some other organizational environmental factors that impact intra-organizational communication effectiveness such as time constraint and physical distance between company personnel.In further exploring the relationships, these factors could be included in future studies.
Lastly, the findings of this study are bounded by the cultural context within which the research was undertaken.More specifically, data was collected in Malaysia, which in most aspects, fits the Asian cultural profile that tends to be collectivist and relations-focused (stronger guanxi).However, the same cannot be said for more individualistic and achievement-oriented nations.Thus, it would be interesting to replicate this study in other countries and to compare the results.

Figure 1 :
Figure 1: Research framework table 1, male respondents made up 46.7%, while female made up 53.3% of respondents.The majority of respondents (65.4%) are in the age group 26 to 35 years old, followed by 21.3% aged between 36 and 45, 5.5% aged 25 and below, 5.5% between 46 and 55 years old and the remaining 2.2% aged 56 and above.In terms of ethnicity, Chinese accounted for 59.6% of respondents, followed by Malay at 19.1%, Indian at 16.9% and others (4.4%).The two most recorded job levels are Executive (54%) and Middle Manager (26.1%).
Table 2 displays the results of normality test for all variables.Skewness and kurtosis values for all variables fall within -1 and +1, indicating that scores are close to normal distribution and suitable for further statistical analysis.

Table 3 . Summary of reliability test
). Findings of this study provide support that a more participative management style, less formalized organizational structure and healthier workplace culture are positively related to communication effectiveness within an organization.Secondly, it adds to the literature on supervisorsubordinate guanxi, which is a relatively new field but is quickly gaining academic acceptance as more scholars recognize that LMX (leader-member exchange) is insufficient to capture the richness of supervisorsubordinate exchanges.While most studies focus on the antecedents and outcomes of supervisor -subordinate guanxi, this paper contributes to understanding the moderating effect of supervisor -subordinate guanxi.It is found that close supervisor -subordinate guanxi has a positive moderating effect on all three relationships between (i) management style and communication (Hwang, 1997) 2009) organizational structure and communication effectiveness and (iii) workplace culture and communication effectiveness.Strong personal relationship between supervisor and subordinate results in stronger emotional ties, support and concern; strengthening mutual interdependence and mutual obligations(Chen et al., 2009).Regardless of the environmental boundaries and rigidity, managers and employees with close supervisor -subordinate guanxi communicate more frequently using informal channels and share more information(Bian, 2006), are more likely to engage in open-minded dialogues (Chen and Tjosvold, 2007) and joint problem solving(Hwang, 1997); thereby improving communication effectiveness.
Individuals occupying managerial Guo and Sanchez, 2009)ions should take time to reflect on their managing styles.Non-participative management approaches are quickly losing popularity in today's dynamic business environment.Instead, an increasing number of authors have advocated for companies to switch to more participative approaches, to encourage open communication and allow employees to have a say in decisions affecting them(Longest, Rakich and Darr,  2005;Guo and Sanchez, 2009).This way, employees are more likely to develop a sense of ownership for their organizations, become more committed to their work, experience increased job satisfaction and are more willing to communicate.