An overview of corporate social responsibility 4 what is the business case for csr. Carrolls 1991 pyramid of corporate social responsibility. General categories of stakeholders include stockholders. Corporate social performance csp refers to the principles, practices, and outcomes of businesses relationships with people, organizations, institutions, communities, societies, and the earth, in terms of the deliberate actions of businesses toward these stakeholders as well as the unintended externalities of business activity. However, there is little theoretical underpinning to explain how social performance is evaluated and integrated into strategic decision making. Using a greatlyimproved source of data on corporate social performance, this paper reports the results of a rigorous study of the empirical linkages between financial and social performance. Firms use reference points to evaluate financial performance, frame gain or loss positions, and guide strategic behavior.
The concept of corporate social responsibility csr has emerged over the past 30 years to occupy a significant role in certain aspects of the organizational theory. In our conception, legitimacy theory has the role of explaining the behavior of organizations in implementing and developing voluntary social and. How does corporate social performance csp affect firm financial perfor mance as the. Corporate social performance corporate response to social and political issues law and the existing public policy process are taken as a reference for social performance balances the interests of firms stakeholders searches for social legitimacy and processes to give appropriate responses to social. Specifically, attribution theory predicts and experimental evidence supports the notion. Even though such connotations are common in the literature, they are misrepresentations of csp. A framework for analysing corporate social performance. An empirical investigation of the relationship between change in corporate social performance and financial performance.
To develop a more finegrained approach to the management of social issues, this article specifies an issuecontingent model of corporate social performance as a. Miles pays little attention to corporate social responsibility principles, or moral reflection. Utilitarian, managerial and relational theories of csr utilitarian theory managerial theory relational theory. This is why the concentration of the this paper will be on the concept of corporate social responsibility csr. According to mcguire 1963 social responsibility is more important than the companys economic responsibility and legal responsibility. Corporate social responsibility and organizational. Corporate social responsibility for sustainable business. This article argues that one of the principal difficulties in measuring csr performance lies with the unit of analysis and that its social, environmental and economic impacts need to be examined. Mar 01, 2000 this article presents a contingency theory of corporate social performance as a function of the fit between the nature of the social issue and its corresponding strategies and structures. There has been a search for indicators of corporate social performance csp that would be comparable to profitability measures of financial performance such as return on investment. Csp is also found to be positively associated with future financial performance, supporting the theory that good management and csp are positively related. Different perspectives have been offered to clarify the significance or generally of corporate social responsibility csr in business operations.
This research investigates how the characteristics of the stakeholder landscape influence a firms csp breadth. Corporate financial performance and corporate social. Pdf a contingency theory of corporate social performance. Implementing corporate social responsibility 18 task 1. This part of the model explains the specific topics that a business must consider with the first two. The purpose of this paper is to examine the impact of csr and firms operational competitive performance in terms of cost, quality, flexibility and delivery, as well as the overall performance, from a developing countrys. The stakeholder approach in corporate social responsibility ventsislava nikolova1, sanela arsic2, 1phd student at university of ruse, faculty of business and management, 2 phd student at university of belgrade, technical faculty in bor abstract the corporate social responsibility csr theory consists not only of theories, but also a. Corporate social responsibility and sustainable business.
Institutional theory has long established that organizations are embedded within broader. Rynes abstract most theorizing on the relationship between corporate socialenvironmental performance csp and corporate. Evaluating corporate social responsibility performance. We find that the political system, followed by the labor and education system, and the. Theory of performance the theory of performance top develops and relates six foundational concepts italicized to form a framework that can be used to explain performance as well as performance improvements.
Corporate social responsibility and stakeholder value. The key concepts of business social performance include competitive ess, responsibility, legality, and legitimacy. Analyzing the concept of corporate social responsibility. Corporate social responsibility and organizational performance.
A framework for analysing corporate social performance beyond. Assessing corporate social performance from a contingency theory. The relationship between corporate social responsibility and. The development of the csp concept has occurred somewhat in parallel with the csr concept, but with a slightly different emphasis. Pdf an empirical investigation of the relationship. Theories of corporate social responsibility management essay. Assessing corporate social performance from a contingency. The article concludes by describing ways of assessing corporate social performance from industry and also from the academic literature. Corporate social performance for our purposes it is necessary to distinguish two notions of csp. The corporate social performance also include the principles of csr, expressed on institutional, organizational and individual levels, processes of corporate social responsiveness, such as environmental assessment, stakeholder management and issues management, and outcomes of corporate behavior including social impacts, social programs and. Therefore, this study specifically tests the hypothesis that managerial entrenchment practices are positively related to improvements in csp which, in turn.
Principles of social responsibility are framed at the institutional, organizational, and individual levels. Corporate social responsibility and firms performance. This relationship is investigated by examining how change in csp is related to change in financial accounting measures. Using a reliable source of data on corporate social performance. One primary focus of the discussion regarding corporate social. Corporate social performance has been a topic of academic study for several decades, and the concept itself has been in use in the united states since the mid1970s. Thus, we argue that analyst recommendations mediate the relationship between corporate social performance and firm stock returns.
Figure 1 explaining the theoretical linkages of corporate social responsibility theories table 1. Concretely the gsi will compile a set of weighted social, environmental, and economic key performance indicators kpi and establish an overall classification with the possibility of direct comparison between companies, even those in different sectors of activity. Concept of corporate social responsibility the corporate social responsibility csr concept came into popularity in the late 1960s copper and madden, 1995. We fill this void with new theory built on the premise that inherently ambiguous social performance is evaluated and interpreted. Issn 1808057x a preliminary version of this study was presented at the 5th meeting on strategic studies anpad 3 es 2011 under the title corporate social performance and corporate financial performance. This article presents a contingency theory of corporate social performance as a function of the fit between the nature of the social issue and its corresponding strategies and structures. About the same time, wartick and cochran 1985 published their integrative paper on csp, building on carrolls work 1979 and attempting to construct a general model of corporate social performance. Every firm can be evaluated on its social performance, and a firms social performance can be negatively or positively evaluated.
Further, social policy is considered only to the extent. Due to the acceptance and impact of carrolls csr contributions, it may be appropriate to reexamine his model to determine whether it can be modified or improved or if there is a possible alterna tive approach to conceptualizing corporate social responsibility. Using a sample of firms from 42 countries spanning seven years, we construct an annual composite csp index for each firm based on social and environmental metrics. Using a reliable source of data on corporate social performance csp, this study explores and tests the relationship between csp and corporate financial performance cfp. The need for companies to undertake activity that might be regarded as socially. Corporate social performance csp is found to be positively associated with prior financial performance, supporting the theory that slack resource availability and csp are positively related. The study is relevant to corporate responsibility, corporate citizenship and corporate performance.
Board attributes, corporate social responsibility strategy. A performer can be an individual or a group of people engaging in a collaborative effort. Corporate social performance management oxford bibliographies. Understanding the conceptual evolutionary path and. According to the own comparative analysis, the malcolm baldrige model for performance excellence is more suitable tool for the evaluation of corporate social responsibility activities of companies the economic item is present in each criterion of the efqm excellence model and the item stakeholder is present in each criterion of the malcolm. Oct 19, 2012 despite growing evidence of the benefits to a firm of improving corporate social performance csp, many firms vary significantly in terms of their csp activities. As suggested earlier, the concept of corporate social performance csp is an extension of the csr concept that places more of an emphasis on results achieved. Wood 199t, have been the subject of many conceptualizations originating mainly from the management literature. Corporate social responsibility and financial performance relationship. Corporate social responsibility and financial performance. Jun 05, 2017 the concept of corporate social responsibility csr has emerged over the past 30 years to occupy a significant role in certain aspects of the organizational theory.
The key concepts of business social performance include competitive. The evolution of the corporate social performance model. The prominence of corporate social responsibility csr initiatives today suggests that the corporate perception of such policies has shifted from an unnecessary addition to a critical business function. Nov 21, 2018 corporate social investment is a form of corporate social responsibility, which is a companys overarching approach or strategy for improving the social, environmental and economic wellbeing of their community or society at large. Corporate responsibility or sustainability is therefore a prominent feature of the business and society literature, addressing topics of business ethics, corporate social performance, global corporate citizenship, and stakeholder management. This article defines corporate social performance csp and reformulates the csp model to build a coherent, integrative framework for business and society research. It also examines social issues management as a dimension of corporate social performance. Using stakeholder theory, we specifically propose that several factors increase the salience and impact of. Clarkson 1995 recognized the coarse nature of the social performance indicators and made a significant step forward by. A contingency theory of corporate social performance bryan.
Some thoughts on future research agenda april 6, 2017. A contingency theory of corporate social performance business. Pdf an empirical investigation of the relationship between. The findings provide some support for a tenet in stakeholder theory which asserts that the dominant stakeholder group. Using a greatly improved source of data on corporate social performance, this paper reports the results of a rigorous study of the empirical linkages between financial and social performance. This encyclopedia entry provides an overview of the topics of corporate social responsibility csr and corporate social performance csp. An empirical investigation of the relationship between change in. Many csr studies have discussed social activities as being the major responsibility of csr. The notion of csr has became more significant with time.
Social issues of stakeholders is the last element of corporate social performance analysis. In particular, as corporate social performance is often uncertain and ambiguous to general investors, analysts may serve as the informational pathway connecting corporate social performance to firm stock returns. A contingency theory of corporate social performance. Corporate social responsibility csr, stakeholder theory, agency problem, nexus of contract, merger, announcement return. The findings provide some support for a tenet in stakeholder theory which asserts that the dominant.
Defining corporate social responsibility csr analyses economic, legal, moral, social and physical aspects of environment. These concepts parallel the four questions outlined below. Csp broad refers to the notion of csp as encompassing csr 1, csr 2, and csp narrow. The relationship between corporate social performance and.
Corporate social performance csp is found to be positively associated with prior financial performance, supporting the theory that slack resource. In doing so, it also directly responds to the need for developing a better understanding of the decisions and activities that a board undertakes to address the growing corporate environmental and social challenges mallin et al. Ethics enables managers to go beyond profits when considering corporate performance. Csr was perceived controversial and suspected to be inconsistent. With a broadbased index of corporate social performance, we test whether there. Multiple stakeholders a set expectations for corporate performance, b experience the. In so doing, it integrates elements of the corporate social responsiveness, issues management, and stakeholder management literatures. Corporate social responsibility and sustainability. Islam, muhammad azizul, csr reporting and legitimacy theory. Pdf corporate social responsibility csr and corporate. Csr policy functions as a builtin, selfregulating mechanism whereby business monitors and ensures its. Pdf this article presents a contingency theory of corporate social performance as a function of the fit between the nature of the social issue.
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