- Get Free Essays and Term Papers

To What Extent Is Corporate Social Responsibility (csr) Beneficial to a Company’s Performance?

Autor:   •  October 8, 2017  •  1,845 Words (8 Pages)  •  376 Views

Page 1 of 8


Yet, the contingent relationship between CSR and company achievements is developed under the prerequisite that CSR actions are strategically aligned to both corporate ability and strategic direction. Corporate ability refers to corporate innovative capacity and cost advantage, which determines whether the company could sustain competitive prices and product qualities and hence perpetuate customer satisfaction (Luo & Bhattacharya, 2006). In the competitive market, although customers are more willing to pay premium prices for socially responsible firms, other purchase considerations such as price, quality and service still remain prominent (Vogel, 2006). Therefore, to realize returns from CSR, companies should assess their ability to maintain competitive differentiation in the market. Also, since every corporation operates in different competitive context, it is imperative that companies systematically tailor CSR initiatives to their corporate strategies, in pursuit of convergence between social impact and corporate growth (Porter and Kramer, 2009). Uncoordinated strategies, which are disconnected to the firm’s core businesses and are generically designed merely to placate the stakeholders, may generate minimal impact both socially and economically (Grow et al., 2005). For example, despite the dedication of Wal-Mart to charitable donation and community outreach, its goodwill plunged and sales growth stagnated once the discriminatory labor policies were revealed (Vogel, 2006). Therefore, to create long-term benefits to both community and business, shared values should be identified when devising CSR initiatives.

In conclusion, CSR activities are found to positively influence organizational performance in relation to three major stakeholders of corporations– employees, customers and investors. Internal benefits of CSR on productivity are first delineated through employee attraction, motivation and retention. This is followed by the external benefits from corporate image enhancement, namely improved customer satisfaction and investors’ stock preference. Nevertheless, to optimally capture these benefits, companies are advised to identify societal issues that are compatible to their long-term goals and competitive advantages. In the study of CSR, the inconsistent results primarily stem from the conditional and interrelated nature of CSR, where some mediating variables or situational factors such as individual firm differences and market sentiments may nuance the research findings. Another methodological limitation is the lack of universal yardstick to assess company performance. Therefore, future research may propose new metrics that are more precise and unbiased in assessing company performance, and study the differential effects of CSR across industries and countries.



Ali, I., Rehman, K. U., Ali, S. I., Yousaf, J. and Zia, M. (2010). Corporate social responsibility influences, employee commitment and organizational performance. African Journal of Business Management, 4(12), 2796-2801.

Aupperle, K. E., Carroll, A. B., and Hatfield, J. D. (1985). An empirical examination of the relationship between corporate social responsibility and profitability. Academy of Management Journal, 28(12), 446-463.

Backhaus, K. B., Stone, B. A., and Heiner, K. (2002). Exploring the relationship between corporate social performance and employer attractiveness. Business and Society, 41(3), 292-318.

Bhattacharya, C. B., Sen, S., & Korschun, D. (2008). Using corporate social responsibility to win the war for talent. MIT Sloan management review, 49(2).

Brown, T. J., and Dacin, P. A. (1997). The Company and the Product: Corporate Associations and Consumer Product Responses. Journal of Marketing, 61(1), 68-84.

European Commission. (2001). Promoting a European Framework for Corporate Social Responsibility: Green Paper. Office for Official Publications of the European Communities.

Friedman, M. (1970). The social responsibility of business is to increase its profits. New York Times Magazine, 122-126.

Greening, D. W., and Turban, D. B. (2000). Corporate Social Performance as a Competitive Advantage in Attracting a Quality Workforce. Business and Society, 39(3), 254-280.

Grow, B., Hamm, S., and Lee, L. (2005, August 15). The Debate Over Doing Good. BusinessWeek, 76-78.

Harvey, F. (2004, October 14). Making a Dash for Green Growth. FT Sustainable Business, 6.

Hayek, F. A. (1969). The corporation in a democratic society: in whose interst ought it and will it be run? Business Strategy. Harmondsworth: Penguin Books.

Homburg, C., Koschate, N. and Hoyer, W. D. (2005). Do satisfied customers really pay more? A study of the relationship between customer satisfaction and willingness to pay, Journal of Marketing, 69, 84-96.

Kim, H. R., Lee, M., Lee, H. T., & Kim, N. M. (2010). Corporate social responsibility and employee-company identification. Journal of Business Ethics, 95(4), 557‐569.

Kotler, P., and Nancy, L. (2004). Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause. New York: John Wiley & Sons.

Luo, X., & Bhattacharya, C. B. (2006). Corporate social responsibility, customer satisfaction, and market value. Journal of Marketing, 70(4), 1-18

McWilliams, A., and Siegel, D. (2000). Corporate social responsibility and financial performance: Correlation or misspecification?. Academy of Management Journal, 31(4), 854-872.

Murray, K. B., Vogel, C. M. (1997). Using a hierarchy-of-effects approach to gauge the effectiveness of corporate social responsibility to generate goodwill toward the firm: financial versus nonfinancial impacts. Journal of Business Research, 38, 141-159.

Pivato, S., Misani, N. and Tencati, A. (2008). The impact of corporate social responsibility on consumer trust: the case of organic food. Business Ethics: A European Review, 17, 3-12.

Porter, M. E. and Kramer, M. R. (2006). Strategy and Society: The Link between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review, 84(12).

Sharfman, M. P., Fernando, C. S. (2007). Environmental Risk Management and the Cost of Capital. Strategic Management Journal, 29(6), 569-592.

Vogel, D. (2007). The market for virtue: The potential and limits of corporate social responsibility. Brookings


Download:   txt (13.3 Kb)   pdf (96.9 Kb)   docx (14.4 Kb)  
Continue for 7 more pages »
Only available on