The Relationship Between Csp and Cfp

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Finding and Contribution
According to many studies and researches over the past 30 years have shown there is an existence of a positive relationship between CSP and CFP. (Frooman, 1997) The data accumulated over the past 30 years do not support the latest contingency theory in the area of corporate social responsibility. (Soana, 2011) Some authors argue that good CFP leads to good CSP because more profitable companies have more resources for investing in socially responsible initiatives. On the other hand, some others believe that Corporate Social Responsibility can determine higher financial results thanks to strategy reassessment, process improvement, and employee, customer and local community loyalty. As well as, the positive relationship between CFP and slack resources argument of CSP could not cover the weaker of the negative relationship itself. Some firms choose the solution for CSP by motivating and using “ecological” but still practice profit maximization in the state of “premature” of their company’s lifecycle. For some reputation effects purpose, the public and some other non-market environments may be the reason for the organization to change their long term strategies and consider those social issues to prevent bad reputation CSP disclosures. According to the article, they stated with confidence that the association between CSP and lagged CFP is not negative and it seems to affect each other through a virtuous cycle likewise the financially successful companies spend more on social responsibility activities because their finance supports them. However, the meta-analysis decline the idea that CSP is incompatible and unnecessary with shareholder wealth maximization. For the effectiveness organisation may need more combination of financial and social performance. The article also mentioned that the notions of libertarians such as Friedman that government regulation in the area of CSP may not be necessary. If the analysis shows the negative...
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