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The Relationship between Strategic Corporate Social Responsibility and Business Performance: an Empirical Investigation

Purpose – The purpose of this study is to investigate what is the effect of 7 dimensions of Corporate Social Performance (CSP) on 5 indicators of Corporate Business Performance (CBP), and to ascertain the nature and the strength of the relationship between the two sets of variables.

Design/Methodology/Approach – Using CSP data gathered from CR Magazine 100 Best Corporate Citizens list and CBP data gathered from Fortune 500, this study investigates the CSP-CBP relationship on a sample of 95 US-based companies over a three-year period performing a panel data multiple linear regression.

Findings – The results of the study highlighted a mildly positive relationship between CSP and CBP. Many of the relationships examined have been found to be non significant, while the most important results are a positive association between Climate Change and both Net Revenues and EBITDA, and a negative association between Human Rights and EBITDA; moreover, accounting-based and short-term measures were influenced more than, respectively, market-based and longer-term measures of CBP.
Overall, the results are in agreement with previous research, and point towards an engagement in CSR investments, although these are not likely to be the most profitable investments possible, at least according to the standard ways of evaluating investments.

Research Limitations – There are two main limitations in this study. Firstly, the sample is rather small and solely comprises US-based companies. Secondly, the CSR rankings evaluate companies in relative terms, so that a comparison of the same company over the years is hampered, and this may have influenced the results.

Practical Implications – The results do not indicate extraordinary benefits deriving from investments in CSR, although they neither highlight costs associated with them. Therefore, considering the increasing call for a socially responsible behaviour on the part of companies, social investments may help companies to be ‘socially licenced’ and gain a competitive advantage in the future.

Originality/Value – To the best of our knowledge, this is the first study to adopt CSP data gathered from CR Magazine 100 Best Corporate Citizens list when studying the CSP-CBP relationship.

Mostra/Nascondi contenuto.
8 CHAPTER 1: INTRODUCTION 1.1 Background Corporate Social Responsibility (CSR) has gained legitimacy only in the last few years, despite being a long-lasting concept. Just few years ago, in 2005, The Economist criticised CSR, which was labelled as “based on a faulty… analysis of the capitalist system”; the article cited Adam Smith’s Wealth of Nations, according to which the capitalist system is pivoted on the search for profit (The Economist, 2005). Moreover, an article in The Guardian stated that the concept had not been reaching companies’ staff, who regarded CSR as a mere PR exercise (Pandya, 2004). However, The Economist’s opinion on CSR changed in few years. In 2008, CSR was described as mainstream and unavoidable for large companies; this because of public pressures and because of concerns about the environment caused by the model of development brought by globalisation (The Economist, 2008). Moreover, in a Financial Times article, Moore (2012) strongly sustained the necessity to include social projects as part of MBA required curricula, in order to educate students in the subject. Despite the upsurge in the importance of CSR, which is nowadays believed to create shareholder value, it is difficult to assess this value in univocal terms, and this is why many CFOs still do not consider CSR investments when evaluating the attractiveness of business projects (McKinsey & Company, 2009). This does not change the fact that considering CSR has become by now essential; however, what many companies have not yet understood is that CSR should not be viewed only in terms of compliance, but also in terms of an opportunity to improve business performance. Indeed, many researchers have been trying to demonstrate how CSR can be advantageous for companies as well as for society. Moreover, the fast growth of emerging economies, like the BRIC countries, since the beginning of the globalisation process brings a problem of resource scarcity and, hence, of sustainability of the current economic model of development. Not only does this cause concerns about power sources and climate change, but it also raises concerns about workers’ rights in countries whose legislative systems are not yet strengthened (Blowfield and Murray, 2011).

Laurea liv.I

Facoltà: Economia

Autore: Alessandro Bettiol Contatta »

Composta da 53 pagine.


Questa tesi ha raggiunto 252 click dal 22/10/2013.


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