To what extent CSR benefit to a company’s performance?
Over decades, corporate social responsibility (CSR) has been gaining magnitude in terms of corporation strategic decision. Public perception of CSR gradually evolves from oversimplified notion of social contribution into the integration of both social good and corporation interests. In 2004, Business for Social Responsibility (BSR) defined CSR as “achieving commercial success in ways that honor ethical values and respect people, communities, and the natural environment.”(Arumugam, Selvakumar& Sivamurugam, 2014). Simultaneously, heated debates on impact that CSR imposed on corporation performance is long lasting without reaching universal consensus. Nevertheless, implementing CSR initiatives on business strategy has becoming a remarkable trend and rages across major corporations globally.
Therefore, this essay aims at constructing overall positive correlation between CSR and corporate performance whereas acknowledging complexity of the relationship due to intra-industrial variance of corporation natures and inter-industry difference in corporate ability. To better structuring the justification, the essay elaborates on financial performance and operational performance separately from multiple dimensions of stakeholders, including employee, customer, shareholder and government.
1.Financial performance
To demonstrate the correlation lies between CSR and financial performance, this part examines the effects on corporate accounting value and market value respectively. CSR measures enhance company accounting performance by cutting costs and elevate market value by attaining customer satisfaction and risks reduction. 1.1 Costs reduction
Gaining universal acknowledgement among executives and managers, costs reduction is one of the important outcomes of CSR activities. A survey conducted by