To What Extent Is Csr Beneficial to a Company's Performance
To What Extent is CSR Beneficial to a Company’s Performance?
Corporate social responsibility (CSR), which is a popular debate topic over decades, has divided into five major dimensions over time. They are known as the stakeholder dimension, the social dimension, the economic dimension, the voluntariness dimension and the environmental dimension in research (Dahlsrud, 2008). The relationship between CSR and company’s performance, which is classified as the stakeholder dimension, aroused a controversial discussion among different research studies. Some research reported positive relationship in CSR and company’s performance (Mirvis, 2012), some research found negative results (Karnani, 2010), while there are also other research view CSR as an irrelevant aspect to company’s performance (McWilliams and Siegel, 2000). The various results reported by different studies may cause confusion for corporations to decide whether to adopt CSR evaluation or not. In order to make appropriate decision for the future of the company, it is really significant to identify to what extent is CSR benefit to a company’s performance.
In this paper, the author suggests that corporate social responsibility may not be truly influential to the company’s performance by analyzing and evaluating the reasons why there are various results concluded by different research from positive, negative, to neutral.
Research indicating that CSR is beneficial to a company’s performance found that companies with more attention on CSR will build good corporation fame and then performance better as a company, because it will be more attractive to customer and have stronger employees’ loyalty. Also, putting more attention on CSR may actually help the company to cut costs, and thus better off in performance. In general, Kang, Lee and Huh’s (2009) research on the relationship between CSR and company’s performance in hospitality industry used ratio analysis and found out that for hotels and restaurants, positive
Corporate social responsibility (CSR), which is a popular debate topic over decades, has divided into five major dimensions over time. They are known as the stakeholder dimension, the social dimension, the economic dimension, the voluntariness dimension and the environmental dimension in research (Dahlsrud, 2008). The relationship between CSR and company’s performance, which is classified as the stakeholder dimension, aroused a controversial discussion among different research studies. Some research reported positive relationship in CSR and company’s performance (Mirvis, 2012), some research found negative results (Karnani, 2010), while there are also other research view CSR as an irrelevant aspect to company’s performance (McWilliams and Siegel, 2000). The various results reported by different studies may cause confusion for corporations to decide whether to adopt CSR evaluation or not. In order to make appropriate decision for the future of the company, it is really significant to identify to what extent is CSR benefit to a company’s performance.
In this paper, the author suggests that corporate social responsibility may not be truly influential to the company’s performance by analyzing and evaluating the reasons why there are various results concluded by different research from positive, negative, to neutral.
Research indicating that CSR is beneficial to a company’s performance found that companies with more attention on CSR will build good corporation fame and then performance better as a company, because it will be more attractive to customer and have stronger employees’ loyalty. Also, putting more attention on CSR may actually help the company to cut costs, and thus better off in performance. In general, Kang, Lee and Huh’s (2009) research on the relationship between CSR and company’s performance in hospitality industry used ratio analysis and found out that for hotels and restaurants, positive
References: Dahlsrud, A. (2008). How corporate social responsibility is defined: an analysis of 37 definitions. Corporate social responsibility and environmental management, 15(1), 1-13. Foote, J., Gaffney, N., & Evans, J. R. (2010). Corporate social responsibility: Implications for performance excellence. Total Quality Management, 21(8), 799-812. Haas, P. M. (1992). Banning chlorofluorocarbons: epistemic community efforts to protect stratospheric ozone. International Organization, 46(1), 187-224. Kang, K. H., Lee, S., & Huh, C. (2010). Impacts of positive and negative corporate social responsibility activities on company performance in the hospitality industry. International Journal of Hospitality Management, 29(1), 72-82. Karnani, A. (2010). The case against corporate social responsibility. Wall Street Journal, 23, 1-5. McWilliams, A., & Siegel, D. (2000). Corporate social responsibility and financial performance: correlation or misspecification?. Strategic Management Journal, 21(5), 603-609. Mirvis, P. H. (2012). Employee Engagement and Corporate Social Responsibility (CSR). Encyclopedia of Human Resource Management, Critical and Emerging Issues in Human Resources, 3, 274. Wright, P., & Ferris, S. P. (1998). Agency conflict and corporate strategy: The effect of divestment on corporate value. Strategic Management Journal, 18(1), 77-83.