RESPONSIBLE ENTREPRENEURSHIP VISION DEVELOPMENT AND ETHICS

266 RESPONSIBLE ENTREPRENEURSHIP
Diagram 5: The result of hierarchical classification of countries
To determine the number of clusters that all the countries can be divided, it is necessary
to choose a threshold distance, i.e. the distance above which too “distant” objects will be combined.
We can use the instrument of association for this purpose. The result can be seen in
Diagram 6. There is the point of “fracture” on the chart and the step number m, where there
was a “fracture”. The number of classes is equal to n-m, where n is the number of objects in
the sample. In our case, the step number 30 can be considered as the point of fracture and
get 35 – 30 = 5 classes.
Diagram 6: Determination of the number of clusters using a graph of association
Thus, the level of CSR development and the standard of living of the analyzed countries
can be divided into 5 classes. We will check this assumption by breaking the original data
by the method of K-means with 5 clusters and test the significance of differences obtained
between groups. K-means method is as follows: the computation starts with K randomly cho-