Mediating Effect of Employee Happiness between Corporate Social Responsibility and Employee Innovation in the Manufacturing Companies

Abstract

The objective of this research is to examine the mediating effect of employee happiness on the relationship between Malaysian manufacturing sector internal corporate social responsibility practices and employee innovativeness. As the significance of CSR becomes increasingly apparent on a global scale, there is a noticeable lack of research that specifically examines employee-directed CSR initiatives. As an organisation, internal CSR consists of initiatives that surpass the expectations of its employees and improve the perception of fairness and equity in the work environment. The purpose of this study is to clarify the relationships between innovativeness, employee satisfaction, and internal CSR activities in the Malaysian manufacturing sector. Using the social exchange theory, the research framework was formulated and to achieve the research objective, a quantitative study using survey was used. A total of 403 samples were collected among the employee of manufacturing companies in Malaysia which were selected using convenience sampling. Data were analysed using SmartPLS4 for testing the hypotheses. The study’s findings stress the need for a more comprehensive comprehension of the strategic significance of internal CSR, emphasising its capacity to cultivate a workforce that is more committed, content, and inventive. This research fills a gap in the literature by investigating the mediating effect of employee happiness on the relationship between corporate social responsibility practices and employee innovation in manufacturing. The findings highlight the importance of placing employee-centric CSR practices at the forefront, not only as an ethical obligation but also to gain a competitive advantage during periods of turmoil.