Corporate Social Responsibility: a Theory of the Firm Perspective
TL;DR: In this article, the authors outline a supply and demand model of corporate social responsibility (CSR) and conclude that there is an "ideal" level of CSR, which managers can determine via cost-benefit analysis.
Abstract: We outline a supply and demand model of corporate social responsibility (CSR). Based on this framework, we hypothesize that a firm's level of CSR will depend on its size, level of diversification, research and development, advertising, government sales, consumer income, labor market conditions, and stage in the industry life cycle. From these hypotheses, we conclude that there is an “ideal” level of CSR, which managers can determine via cost-benefit analysis, and that there is a neutral relationship between CSR and financial performance.
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10 Jun 2022
TL;DR: The authors found that the alignment of employee and customer relations with competitive strategy is related to higher earnings persistence, and further explored the relation between a firm's alignment and the market's reaction to the firm's reported earnings.
Abstract: Prior literature suggests that a focus on employee and customer relations alone improves financial performance. However, I find that a focus on employee and customer relations alone is not related to higher earnings persistence, but rather I hypothesize and find that the alignment of employee and customer relations with competitive strategy is related to higher earnings persistence. I further explore this relation by examining the contextual environment in which the firm operates. I consider the moderating variables of firm size, leverage, growth, and corporate governance and find that alignment impacts the persistence of earnings for leverage and governance but not for firm size or growth. I then examine the relation between a firm’s alignment and the market’s reaction to the firm’s reported earnings. The analysis suggests that alignment is critical for cost leaders but is relatively less important for differentiators. Taken as a whole the findings suggest that firm alignment plays a role in earnings quality and is useful to investors in their interpretation of earnings.
01 Nov 2019
TL;DR: In this article, a review of Corporate Social Responsibility (CSR) implementation of sustainable geo-tourism development in West Java Province, Indonesia is presented, where the authors employed data analysis and semi-structured interviews to examine the implementation of a CSR Programme in geo tourism.
Abstract: The focus of this research was to review of Corporate Social Responsibility (CSR) implementation of sustainable geo-tourism development in West Java Province, Indonesia. This study employed data analysis and semi-structured interviews to examine the implementation of a CSR Programme in geo tourism. This study proposed a sustainable business model that refers to the strategic management process. In the case of the CSR Programme of PT. Bio Farma Indonesia (BFI), this has played an essential role through new ways possible to achieve economic, social and environmental success, by accommodating the creation of business growth while promoting benefits to the community through shared value creation. The implementation of the sustainable model concept by the company through adopting well thought out business processes, as well as being a part of the solution for society and the environment is commendable.
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01 Jan 2017
TL;DR: In this paper, the relationship between social performance and financial performance of companies and especially the multinational companies is analyzed from the perspective of the sustainability of the economic process, with the main purpose of analyzing the relationship of social performance to financial performance.
Abstract: This research paper is developed from the perspective of the sustainability of the economic process, the main purpose of analyzing the relationship between social performance and financial performance of companies, and especially the multinational companies. Multinational companies are those in that practice corporate social responsibility is most strongly developed, given their size, financial resources at their disposal, and exposure to various business environments, with different requirements and standards. The intensification global competition puts also pressure to the performance of companies and on a global market increasingly competitive, companies, whether multinational or domestic, attempted business solutions to identify optimal approaches through the prism of profit or integrated approach. Therefore, a number of increasingly more investors become interested not only in the financial performance of companies, but also how companies fulfill their social responsibilities, leading inevitably to changing the orientation pure financial to take consider other issues.
15 Jul 2018
TL;DR: This paper examines if CSR strategies such as embracing a social cause (LGBT and nature) could assist in repairing organizational trust in the wake of a data breach.
Abstract: Data breach is a serious global security and trust concern. Data breaches have both direct and indirect as well as a short-term and long-term financial implications for the victim organization. One of the significant long-term financial costs is the loss of consumer trust in the organization. It seems that the sheer number and size of data breaches, insider data breaches, in particular, is not about to slow down anytime soon. There is a need to heighten information security to prevent such breaches, and there is a need to deploy trust-building strategies to minimize the trust fallout from such breaches. There is plenty of evidence that consumers use corporate social responsibility (CSR) as a means of differentiating one company from another. In this paper, we examine if CSR strategies such as embracing a social cause (LGBT and nature) could assist in repairing organizational trust in the wake of a data breach.
References
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TL;DR: In this article, the authors examined the link between firm resources and sustained competitive advantage and analyzed the potential of several firm resources for generating sustained competitive advantages, including value, rareness, imitability, and substitutability.
46,648 citations
TL;DR: In this paper, a theory of stakeholder identification and saliency based on stakeholders possessing one or more of three relationship attributes (power, legitimacy, and urgency) is proposed, and a typology of stakeholders, propositions concerning their saliency to managers of the firm, and research and management implications.
Abstract: Stakeholder theory has been a popular heuristic for describing the management environment for years, but it has not attained full theoretical status. Our aim in this article is to contribute to a theory of stakeholder identification and salience based on stakeholders possessing one or more of three relationship attributes: power, legitimacy, and urgency. By combining these attributes, we generate a typology of stakeholders, propositions concerning their salience to managers of the firm, and research and management implications.
10,630 citations
TL;DR: In this article, the authors examine three aspects of the stakeholder theory and critique and integrate important contributions to the literature related to each, concluding that the three aspects are mutually supportive and that the normative base of the theory-which includes the modern theory of property rights-is fundamental.
Abstract: ?The stakeholder theory has been advanced and justified in the management literature on the basis of its descriptive accuracy, instrumental power, and normative validity. These three aspects of the theory, although interrelated, are quite distinct; they involve different types of evidence and argument and have different implications. In this article, we examine these three aspects of the theory and critique and integrate important contributions to the literature related to each. We conclude that the three aspects of stakeholder theory are mutually supportive and that the normative base of the theory-which includes the modern theory of property rights-is fundamental. If the unity of the corporate body is real, then there is reality and not simply legal fiction in the proposition that the managers of the unit are fiduciaries for it and not merely for its individual members, that they are . . . trustees for an institution [with multiple constituents] rather than attorneys for the stockholders.
10,163 citations
"Corporate Social Responsibility: a ..." refers background in this paper
...According to Donaldson and Preston (1995), three aspect of this theory-normative, instrumental, and descriptive-are "mutually supportive....
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01 Jan 2007
TL;DR: When I hear businessmen speak eloquently about the social responsibilities of business in a free-enterprise system, I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life as mentioned in this paper.
Abstract: When I hear businessmen speak eloquently about the “social responsibilities of business in a free-enterprise system”, I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free enterprise when they declaim that business is not concerned “merely” with profit but also with promoting desirable “social” ends; that business has a “social conscience” and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact they are — or would be if they or anyone else took them seriously -preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.
9,875 citations
TL;DR: In this article, the authors report the results of a rigorous study of the empirical linkages between financial and social performance, finding that corporate social performance (CSP) is positively associated with prior financial performance, supporting the theory that slack resource availability and CSP are positively related.
Abstract: Strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them. Recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management, rather than traditional arenas of strategic management. 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. 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. CSP is also found to be positively associated with future financial performance, supporting the theory that good management and CSP are positively related.? 1997 by John Wiley & Sons, Ltd
5,922 citations
"Corporate Social Responsibility: a ..." refers methods in this paper
...An empirical test of the CSP framework is presented in the work of Waddock and Graves (1997), who report a positive association be-...
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