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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS The Impact of Corporate Social responsibility toward employees on company Performance: A Jordanian study INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS

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Abstract

Corporate social responsibility has a positive impact contributions to the development of society and businesses performance. The growing concentration to CSR is based on its capability to influence company performance. The CSR movement is diffusion over the world and in the recent years a large number of methods and frameworks have been developed, the majority being developed in the West. The current research focuses on the relationship between CSR and Jordanian Uomneh telecom company performance. Methodology: A case study questionnaire was administered to 120 participants in a large modern regional telecom company over a month in 2014, with results from Likert scales analysed using descriptive analysis, means and SDs to tabulate and analyzed. Results: Analysis of 101 suitable responses among company employees found a significant relationship between CSR and company performance at all the three Hypotheses VOL 6, NO 5 Recommendations: (1) Ensure a good psychological working place within the company and within the company by changed managerial in order to create better work place to satisfy the employees 2) Improve employee overall salary packages for employees which is based on productivity rewards. 3) To improve employees relation in Uomneh company devise an efficient means collaboratively to evaluate and reward the work
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The Impact of Corporate Social responsibility toward employees
on company Performance: A Jordanian study
1- Dr Anber Abraheem shlash Mohammad
Associate professor- Marketing Department
Faculty of finance and administrative science
Petra university- Jordan.
2- Dr- Shadi Mahmd Mosbah Altarifi
Assistant professor- Marketing Department
Faculty of finance and administrative science
Petra university- Jordan.
3- Dr- Khaled K Alafi
Department of Management, The World Islamic Sciences &
Education University, Jordan
Abstract
Corporate social responsibility has a positive impact contributions to the
development of society and businesses performance . The growing concentration to
CSR is based on its capability to influence company performance. The CSR
movement is diffusion over the world and in the recent years a large number of
methods and frameworks have been developed, the majority being developed in the
West. The current research focuses on the relationship between CSR and Jordanian
Uomneh telecom company performance.
Methodology: A case study questionnaire was administered to 120 participants in
a large modern regional telecom company over a month in 2014, with results from
Likert scales analysed using descriptive analysis, means and SDs to tabulate and
analyzed.
Results: Analysis of 101 suitable responses among company employees found a
significant relationship between CSR and company performance at all the three
Hypotheses
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Recommendations: (1) Ensure a good psychological working place within the
company and within the company by changed managerial in order to create better
work place to satisfy the employees
2) Improve employee overall salary packages for employees which is based on
productivity rewards.
3) To improve employees relation in Uomneh company devise an efficient means
collaboratively to evaluate and reward the work
Keywords: Corporate Social Responsibility, Performance, Jordan Uomneh telecom
company
1. Introduction
Corporate Social Responsibility as a concept entail the practice whereby corporate
entities voluntarily integrate both social and environment in their business
philosophy and operations. A business ventures is primarily established to create
value by introduce products and services which society demands. The present-day
conception of corporate social responsibility imply that companies voluntarily
incorporate social concerns in their operations and communication with their
stakeholders. The concept of Corporate Social Responsibility is one of ethical
issues surrounding corporate decision making and behavior, therefore if a firm
should undertake assured activities or refrain from doing so because they are
beneficial or hurtful to society is a essential question. Social issues deserve moral
concern of their own and should lead managers to consider the social impacts of
corporate activities in decision making.
Today, managers of Multinational Companies(MNCs) have found a need that the
society in which they operate should be provided for because their intermediate and
macro have a through impact on the achievement of the corporate objectives and
mission statement. The principle of all Profit-making organizations, and even the
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non-profit making organizations, is to increase profit and in turn decrease cost,
through best employment of available resources to achieve the best results they are
able of. Profitability is an significant factor.
2. Literature Review
2.1 Corporate social responsibility towards employees
The same opportunities for rewards and development should be provided to every
employee for firms to be socially responsible. Responsible employment practices
with well-trained, and motivated employees, who are sufficiently rewarded
sharing in the Company’s successes should be instituted. A company that ignores
this responsibility might likely face a risk of losing productive, highly motivated
employees, a case in point being Del Monte A company should ensure that the
work environment is safe, both physically and socially and should aim to be the
employer of choice in all areas of operation In Jordan, a number of laws are in
place to help guide companies in aspects of employees and the workplace;
examples take in the Employment Act (2010), and the Occupational Health and
Safety Act (2006). For employee satisfaction in the workplace, some scholars have
adopted Maslow’s theory and used his notion of need fulfillment to measure this
factor (Naseem, Sadia & Malik, 2011). Both employee satisfaction and
dissatisfaction are affected by the job environment and by how much job
satisfaction is possible within it (Al-Hussami, 2008). Perceived fairness is one key
factor affecting employee satisfaction and improved performance (Parvin & Kabir,
2011). Nonfinancial measures also have a significant direct effect on procedural
fairness (Sharon, L. C. et. al., 2012). Job satisfaction is a complex factor
surrounding different facets (Alafi et al., 2013) and subject to factors like wages or
salary, working environment, management style and friendly staff relationships
(Lane, Esser, Holte & McCusker, 2010). As a result, the success of an organization
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can be considerably determined and affected, together with performance and profit.
The significance of studies of employee is significant for human relations and
management concerning both people in companies and for the scholars seeking and
analyzing relationships as well as directors and shareholders (Greasley, Bryman,
Dainty, Price, & King, 2005). As well impacts positively on both the perception of
job
satisfaction and actual employee satisfaction at work. How a supervisor acts as a
role model by personal demonstration, Ellickson and Logsdon (2002) who defined
the extent employees like their work as job satisfaction and later Alafi et al. (2013)
agreed with this definition: his addition was to “like” as worker’s “emotional
response” towards the different elements of the work.
2.2 The relationship between Corporate social responsibility and performance
A companies insiders, like managers and huge block holder may seek to over invest
in corporate social responsibility for their private benefits in order to develop their
reputation as good global citizens(Barnea and Rubin ,2010). There is a significant
analyzed relationship between corporate social responsibility activities and
corporate performance for the period of 1991 to 2003 on 650 US companies.
(Blazovich and Smith ,2010) demonstrated the relationship between ethical
corporate citizenship and financial performance. They also examined whether
ethical corporate behaviour was associated with a market-value premium. The
different results indicated a significant relationship between ethical corporate
behaviour and performance. (Fiori et al., 2007)investigated the impact of voluntary
disclosure about corporate social responsibility on firm’s stock prices of Italian
listed companies to analyze whether it could somehow contribute to increase stock
market prices .
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Research conducted by (Joshi et al.,2007) they found that there is strongly
relationship between Profit Making and Social Responsibility . Profit making is the
essential reason for an enterprise to extend and grow while social responsibility is
the basic duty of the "state" that must focus upon the background of its
stakeholders with social justice. They study concentrated that there must be
continuous efforts to reduce this economic difference amongst the country;
however, cases could be different. Hence, strategic innovation emerges as an
imperative tool towards a globally competitive existence and performance. (Lai et
al., 2010) indicated the effect of corporate social responsibility and the firm’s
reputation on its brand equity in business-to-business markets from the employees
viewpoints on a sample of industrial purchasers in Taiwan’s. The results supported
their hypotheses that corporate social responsibility and corporate reputation have
positive effects on industrial brand equity and brand performance.. The researcher
indicated that majority of the companies believe they should pay attention to
corporate social responsibility however, the main barrier to adopt corporate social
responsibility experienced cost and lack of human resources. The study stated a
moderate positive relationship between CSR and performance.
(Cyrus Iraya Mwangi ,2013) stated that the relationship between corporate social
responsibility (CSR) practice and firm performance with some studies showing a
positive relationship. It is with this background that this study sought to establish
the relationship between corporate social responsibility practice and performance
of firms listed in the manufacturing, construction and related sector of the Nairobi
Securities Exchange. Although the study was intended to be a census survey, non-
availability of complete data for some of the companies resulted in only 10 out of
the 14 companies in the sector being studied. (Georgeta VINTIL, 2013) mentioned
that the notion of corporate social responsibility is established on the equal
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dependence between a organization and society, as well as the indicators that
influence this relationship. This study explores whether profitability and
organization size have a possible influence on levels of corporate social
responsibility according the annual dates of Romanian organizations, using
statistical correlations. The research found that organization size and organization
profitability have an influence toward the corporate social responsibility.
Selvi et al., (2010) explored corporate social responsibility impact on company
reputation in Turkey by comparing the relationship between corporate social
responsibility and reputation measures before and after the financial crisis.
provided a framework for analyzing CSR. The model has two important ingredient
CSR is, at least in part, a profit motivated decision; different CSR activities are
aimed at different audiences. The study examine the implications of their
framework using a ‘visible’ CSR index that captures consumer oriented CSR.
Research found that CSR is more prevalent in advertising intensive (consumer
oriented) industries, and the effect of CSR on profits is stronger in competitive
industries, especially when few other firms undertake such actions, suggesting that
CSR may be used as a means of differentiation in otherwise competitive
environments.
3. Objective of Study
The focus in earlier research had been on finding the results about the relationship
between the CSR and Perform different world wide The factor of finding further
information about CSR and Performance will make a good contributions to the
body of the Literature . Consequently this Research aims to explore and identify
strategies that affect the relationship between CSR and performance
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Research Model
3.1 Definition of Corporate social responsibility
A definition for CSR based on the fit between business ethics and societal
expectations. The current study defined the CSR as an practise from the business
toward Employees where the business operate and help the with different issues
like working place , employees salary , and employees relationship with their
supervisor .
3.2 Definition of Performance
The current Research define the performance as a company achievement in result
its practice of corporate social responsibility toward its employees like working
place , salary , and employees relationship with Managers
CSR towards
employees
Working Place
Salary
Employees relation
Performance
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3.3 Hypothesis:
1- There is a positive relationship between the High level of working place
to the employees and Umuneh telecom company performance.
2- There is a positive relationship between the High level of the employees
Salary and Umuneh telecom company performance.
3- A positive significant impact showed of the employees relation with their
supervision and Umuneh telecom company performance.
4. Methodology
The population of the present research covers the Uomnieh telecom company in
Jordan employees. It is an important indication that Jordanan telecom company
play a significant role in Jordan national company and it should be do A CSR
services toward the employees to improve their quality of life . The sampling
method used to collect the data is random sampling in order to avoid bias with the
opinions. Samples were randomly drawn from the different level of the employees
in different branches around the country 120 questionnaires were distributed to the
employees 111returned, and the researchers found 101 valid for analysis.
4.1 Development of questionnaires
The questionnaires are designed to measure the dependent and independent
variables to find the relationship between the CSR and Performance . All questions
in the questionnaire are based on the three hypotheses generated for this research.
The questions were designed in such a way that the respondents were able to
understand and answer the questions . The model of questionnaire for CSR was
adapted from Alafi (2013)as it was referring to three important variables which
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affected its relationship on performance. The first independent variable contains
items applying to the working place of the Company: job location, present working
hours, physical working conditions (4 items). The second independent variable,
Salary, includes questions about employee satisfaction with the existing salary
structure of the company, compensation, other professional workers who left the
job owing to unreasonable salary, level of salary, long term benefit and insurance
policies (4 items). the last independent variable, the employees relations with
supervisor, asked questions workplace managers acting as positive role models,
attitude of managers towards relationships, right to put forward opinions, esteem
and prestige between colleagues, and harmony between employees (5 items) The
dependent Variables measured The company's has a good reputation, The
company achieved high return on investment, expands the company's offices in the
various regions of the country as a result of increased sales, The company has a
market share more than the competitors, The company provides distinctive
products to the high-income people(5 items). The questionnaires consist of two
sections: Section A was designed to measure the independent variables and Section
B measured the dependent variables.
Participants were asked to indicate their awareness on the relationship between the
CSR and company performance . A five -point Likert scale ranging from strongly
disagree (1) to strongly agree (5) was used.
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5. Results:
Table (1): Descriptive statistics of working place
From the Table (1) the means range was (3.13- 4.1), the highest means was for the
item The company offers a good place for their employees to work with a mean
4.1 and STD of (1.12263) while the lowest The work place in the company's
appropriate safety” with a mean of (3.13), and STD of (0.92451) overall mean was
(3.48) with STD of (0.7039)
Table (2): Descriptive statistics of salary
No
Item
Standard deviation
Working place
1.
The company offers a good place
for their employees to work
1.12263
2
physical working conditions
1.0966
3
The work place in the company's
appropriate safety
0.92451
4
The working hours reasonable in
the company
0.93532
Average
0.7039
No
Item
Standard deviation
Salary
5.
My payment compared to the
work that I do is satisfying.
1.07063
6.
My pay encourages me to
improve the level of quality of
my work.
1.01445
7.
Employees that care about
companies objectives are
rewarded.
1.01583
8.
I feel a lot of loyalty to my
company.
1.00257
Average
0.6413
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From the Table (2) the means range was (3.6- 3.80), the highest means was for the
item “I feel a lot of loyalty to my company.with a mean 3.80 and STD of (1.00257)
while the lowest Employees that care about companies objectives are rewarded
with a mean of (3.6), and STD of (1.01583) overall mean was (3.60) with STD of
(0.6413).
Table (3): Descriptive statistics of employees relations
From the Table (3) the means range was (3.4- 4.2), the highest means was for the
item “managers acting as positive role models.with a mean 4.2 and STD of
(1.03257) while the lowest right to put forward opinions with a mean of (3.4), and
STD of (1.01654) overall mean was (3.67) with STD of (0.6813).
No
Item
Standard deviation
employees relations
9
The harmony between employees
very high.
1.17063
10
good relations between
employees and supervisor,
1.01445
11
, esteem and prestige between
colleagues
1.11583
12
managers acting as positive role
models
1.03257
13
right to put forward opinions,
1.01654
Average
0.6813
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Table (4): Descriptive statistics of Performance
From the Table (4) the means range was (3.60- 4.20), the highest means was for the
item “My company achieved high return on investment.with a mean 4.20 and STD
of (0.72370) while the lowest The company achieved a high annual profit with a
mean of (3.60), and STD of (0.70311) overall mean was (3.94) with STD of
(0.74542).
6. Discussion
Work place was also confirmed to have significant influence in umneh telecom
company for aspirations for higher pay, also consistent with findings by Alafi et
al., 2013). A high-quality working place, answering lower order needs first of all,
guarantees security and stability (Safety) followed by relationships in working
groups (Love and Belongingness).
These results above may suggest that management and policy makers should
seriously consider providing their employees with varied or new types of facilities
as in order to give them more job satisfaction findings indicated that most
employees were satisfied with the majority of factors tested in the current study:
"working place, salary, employees relations which was the primary motivator for
employee satisfaction, this consistent with the previous findings coefficient of
No
Item
Mean
Standard deviation
performance
14
My company's has a good reputation
4.00
0.91540
15
My company achieved high return on investment
4.20
0.72370
16.
My company has a market share more than the
competitors
3.85
0.79650
17
I feel that I am a strategic partner in my company
4.06
0.71641
18
The company achieved a high annual profit
3.60
0.70311
Average
3.94
0.74542
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Parvin and Kabir (2011). Also the result of the current study showed a high level of
the significant impact relationship between CSR and company performance which
consistent with Research conducted by (Joshi et al.,2007) they found that there is
strongly relationship between Profit Making and Social Responsibility . Profit
making is the essential reason for an enterprise to extend and grow while social
responsibility is the basic duty of the "state" that must focus upon the background
of its stakeholders with social justice.
7. Implications for management
The significant findings of the current study about the relationship between CSR
and performance have implications in terms of companies management policies.
From a management practice perspective, companies need to adopt modern
Corporate social responsibility practice to achieve a high performance in a world
increasingly demanding of social justice. This adoption of modern CSR practices
should maintain or increase profitability based on the findings of the current study.
The results of the current study suggest that the good relationship between
employees and management ensure a safety working place to the employees will
achieve high profit making and extend the company market share and high
reputation which mean practice the corporate social responsibility toward the
employees increase the company performance.
7.1 Limitations of the Study
Participant bias prevents a high percentage of accuracy Generalization of data to
all Jordanian telecom companies employees is not possible from a single company
7.2 Future Research
Opportunities for future research exist in investigate other factors affecting
companies performance, and also the other factors of employees satisfaction its
possibility affecting the company performance.
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7.3 Recommendations
On basis of the above analysis of three CSR activated toward the employees on the
telecom company , the results suggest the following recommendations to managers
of the Uomneh telecom company to increase performance
1) Ensure a good psychological working place within the company and
within the company by changed managerial in order to create better work place to
satisfy the employees
2) Improve employee overall salary packages for employees which is based on
productivity rewards.
3) To improve employees relation in Uomneh company devise an efficient means
collaboratively to evaluate and reward the work
performance of the best best employees, marking out clear career paths to
encourage workers and demonstrate
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... The obliviousness of companies to these matters can contribute to the demotivation and insecurity of their employees, thereby resulting in high turnover (Tamm, Eamets & Motsmees, 2010;Tuzcu, 2014). By contrast, employees become highly productive and contribute to the bottom line of their companies if they are fairly rewarded and protected (Mohammad et al., 2014;Cavazote & Chang, 2016;Morogo, Cheluget and Mwangi 2016). Therefore, the rewards and protection measures adopted by companies for their employees are top deal in their CSR strategies. ...
... CSR-E is essential for companies to achieve the desired outcomes of their strategies. Previous studies show that CSR-E-related strategies, such as fair wages and salaries, occupational health and safety, education and training, gender and race equity and other social benefits, are important to the performance of businesses (Mohammad et al., 2014, Cavazote & Chang, 2016Morogo et al., 2016). The obliviousness of companies to CSR-E matters can contribute to the demotivation and insecurity of their employees, which in turn can lead to unacceptable levels of employee attrition (Tamm et al., 2010;Tuzcu, 2014). ...
... In this case, companies should consider CSR-E not only as a legal and moral obligation but also as an investment in human capital. Morogo et al. (2016) argued that employee welfare and equity are positively associated with the financial performance of companies, whereas Mohammad et al. (2014) argued that business performance is significantly determined by CSR-E related to workplace conditions, salaries and wages and proper supervision. ...
... Beberapa pelaksanaan tanggung jawab sosial korporat diantaranya yaitu CSR-P dengan memberikan gaji dan penghargaan yang adil, memperlakukan adil kepada setiap para pekerja, mengembangankan keahlian yang dimiliki oleh para pekerja dengan memberikan latihan dan pendidikan terhadap para pekerja, memperhatikan masalah kesehatan dan keselamatan para pekerja dan memberikan fasilitas tempat bekerja yang aman dan nyaman dan lain-lain (Cavazote & Chang 2016; Mohammad et al. 2014;Hernandez et al. 2016). Namun, Indonesia dengan jumlah penduduknya kebanyakan adalah para pekerja didapati masih berhadapan dengan masalah mengenai kesejahteraan para pekerja (ILO 2015). ...
... Amalan tanggung jawab sosial korporat merupakan wujud perilaku etik dan tanggung jawab moral daripada pihak perusahaan terhadap dampak sosial operasi syarikat (Mohammad et al. 2014). Perusahaan melaksanakan CSR-P untuk memenuhi kewajiban terhadap kepentingan pihak stakeholder. ...
... Beberapa dimensi tanggung jawab sosial korporat diteliti oleh para peneliti sebelumnya sebagai faktor yang dapat mempengaruhi kinerja ekeonomi. Berdasarkan tinjauan litelatur, para peneliti sebelumnya kebanyakan meneliti tanggung jawab sosial korporat dalam berbagai dimensi diantaranya dimensi masyarakat, sosial, ekonomi, alam sekitar, undang-undang, etika dan lainlain (Cavaco & Mohammad et al. 2014;Hernandez et al. 2016). Oleh karena itu penelitian ini akan meneliti secara empirikal mengenai pengaruh tanggung jawab sosial korporat terhadap kinerja ekonomi dengan memfokuskan penelitiannya terhadap tanggung jawab sosial korporat terhadap pekerja. ...
... Menurut Jones (1980), perusahaan memiliki kewajiban melaksanakan tanggung jawab sosial korporat sebagai bukti tanggung jawab sosial korporat terhadap masyarakat, pemegang saham dan pihak lainnya yang diatur dan ditentukan oleh hukum ataupun kontrak dengan persatuan (Low 2015). Sedangkan menurut Commision of the European Communities (2002) tanggung jawab sosial korporat merupakan interaksi secara sukarela pihak perusahaan dengan stakeholder untuk mengatasi kebimbangan masalah sosial dan alam sekitar akibat dari aktivitas operasional perusahaan (Tuzcu 2014; Mohammad et al. 2014). ...
... Tanggung jawab sosial korporat terhadap pekerja merupakan usaha perusahaan untuk mewujudkan manajemen sumber daya manusia yang produktiv dengan cara menyediakan dan memenuhi keperluan para pekerja. Apabila perusahaan melaksanakan tanggung jawab sosial korporat terhadap pekerja maka pekerja akan merasa mendapatkan kepuasan kerja, lebih termotivasi dalam bekerja sehingga tercapainya kinerja ekonomi perusahaan (Skudiene & Auruskeviciene 2012; Tamm et al. 2010;Mohammad et al. 2014). Penelitian tanggung jawab sosial korporat terhadap pekerja dikaji oleh para peneliti sebelumnya dengan mempergunakan beberapa item seperti tanggung jawab sosial korporat terhadap pekerja dengan memberikan gaji yang sesuai, memberikan latihan dan pendididkan terhadap para pekerja, jaminan kesehatan dan keselamatan kerja, tidak diskriminasi terhadap pekerja (Cavazote & Chang 2016; Mohammad et al. 2014;Hernandez et al. 2016;Balbanis et al. 1998). ...
... Apabila perusahaan melaksanakan tanggung jawab sosial korporat terhadap pekerja maka pekerja akan merasa mendapatkan kepuasan kerja, lebih termotivasi dalam bekerja sehingga tercapainya kinerja ekonomi perusahaan (Skudiene & Auruskeviciene 2012; Tamm et al. 2010;Mohammad et al. 2014). Penelitian tanggung jawab sosial korporat terhadap pekerja dikaji oleh para peneliti sebelumnya dengan mempergunakan beberapa item seperti tanggung jawab sosial korporat terhadap pekerja dengan memberikan gaji yang sesuai, memberikan latihan dan pendididkan terhadap para pekerja, jaminan kesehatan dan keselamatan kerja, tidak diskriminasi terhadap pekerja (Cavazote & Chang 2016; Mohammad et al. 2014;Hernandez et al. 2016;Balbanis et al. 1998). Berikut ini beberapa itemitem tanggung jawab sosial terhadap pekerja yang digunakan oleh para peneliti sebelumnya: (2012) 1. Perusahaan kami melibatkan para pekerjanya dalam aktivitas sukarela 2. manajer perusahaan kami memperhatikan keinginan dan keperluan parapekerja 3. perusahaan kami melaksanakan kebijakan yang fleksibel dalam memberikan pekerjaan yang baik dan keseimbangan hidup bagi para pekerjanya 4. kebijakan perusahaan kami mendukung para pekerja untuk mengembangkan keahlian dan keterampilan 5. manajer bersikap adil dalam membuat keputusan untuk para pekerja Weldon et al. (2013) 1. ...
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