Page 1 of 4
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 02
March 2015
Available online:http://internationaljournalofresearch.org/ P a g e | 192
Impact of Corporate Social Responsibility on the Performance of
the Companies
Bhupinder Kaur
Assistant Professor S.D.College (Lahore), Ambala Cantt
bhupinderkaur750@gmail.com
ABSTRACT
This study aimed to identify the effect of
corporate social responsibility (CSR) on the
profitability of the companies. As business
organizations increasingly invest in corporate
social responsibility (CSR), it becomes critical
to accurately examine the effects of these
endeavours. In particular, business Leaders
should be able to rely on a coherent set of
metrics to assess and prioritize the goals of
Different stakeholders—the ultimate
beneficiaries of CSR programs—and to
regularly evaluate progress made by the
company in pursuing those goals. The study
recommends that the companies should
increase the efficiency of workers constantly in
order to improve efficiency and productivity to
maximize profits, Industrial companies should
pay more attention to public interest for the
community The most important findings
indicate that there is a significant relationship
between CSR activities and profitability of the
industrial companies in general and there is
effect of the variables.
Key words:
Corporate social responsibility; profitability;
companies; non-profit organizations
Introduction
Business organizations use CSR initiatives to
build and strengthen relationships with
multiple stakeholder groups. These groups may
extend even beyond customers, suppliers, and
competitors to include investors, employees,
and members of the board of directors, local
communities, regulators, media, and financial
markets. CSR activities affect a variety of
different stakeholders, with potentially
conflicting interests and goals. Because of the
complexity of this context,
Corporations need to rely on a set of metrics to
compare, integrate, and reconcile what may be
quite disparate objectives. This report discusses
a stakeholder-based approach to measuring the
effectiveness of CSR activities. Profitability
enhancement Two reasons have been suggested
for companies engaging in CSR initiatives: as a
route to profitability and as an end in itself.
First, company managers believe that CSR
initiatives focusing on intermediate non- financial objectives with short-term negative
cash flows may have a positive long-term
effect on firm value. Corporate social
responsibility can increase firm value in a
variety of ways; specifically, by:
• facilitating the design of innovative products;
• attracting labour;
• attracting and retaining customers;
• reducing manufacturing costs; and
• providing reputation insurance in a crisis
In addition, the mere conduct of CSR activities
can send a positive signal to regulators and
investors, in turn generating financial results. A
qualitatively different reason espoused for CSR
activities is that internal stakeholders such as
employees, management, and board members
may have a set of extra-financial values and
life goals that motivates them to feel good
about themselves by returning to society part of
the wealth they create through their service at
the corporation. CSR is about how companies
manage the business processes to produce an
overall positive impact on society. For these
reasons, measuring (financial and extra- financial) costs and benefits of CSR to a range
of stakeholders is critical for companies to
make informed decisions regarding their CSR
initiatives. However, CSR effects can be hard
to identify and calibrate, as evidenced by over
one-third of a century of research into whether
(and when) CSR activities add value to the
Page 2 of 4
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 02
March 2015
Available online:http://internationaljournalofresearch.org/ P a g e | 193
firm, over what time period, and through which
pathways.
Corporate social responsibility
Corporate Social Responsibility is the
continuing commitment by business to behave
ethically and contribute to economic
development while improving the quality of
life of the workforce and their families as well
as of the local community and society at large.
Positive impact of corporate social
responsibility activities
Corporate Social Responsibility –
Corporations
The current consumer climate doesn’t allow for
companies to simply be in business for the sake
of making a profit. While consumers may rely
on corporations for goods and services, the
level of competition allows customers to make
decisions based on how much good a
corporation is doing outside of the workplace
and how they are positively impacting their
community.
Public Image
A corporation’s public image is at the mercy of
its social responsibility programs. According to
a study by Cone Communications, 9 out of 10
consumers would refrain from doing business
with a corporation if there existed no corporate
social responsibility plan.
For example, if a company is heavily involved
in the practice of donating funds or goods to
local non-profit organizations and schools,
consumers are more likely to use their product.
Or if a corporation takes great care to ensure
the materials used in its products are
environmentally safe and the process is
sustainable, this goes a long way in the eye of
the public.
Remember, consumers feel good shopping at
institutions that help the community. And
that’s good for business
Media Visibility
The amount of positive media coverage a
corporation receives can have a significant
impact on the company’s bottom line. How
much good a company does in its community
or beyond reflects its corporate social
responsibility values. And the more positive
the benefits to the community, the more media
coverage a company will likely receive.
On the other hand, the media will often also
cover corporations that participate in
production or activities resulting in negative
community impact. Media visibility is only
useful when it sheds a positive light on your
organization.
Positive workplace environment
It’s just common sense – employees like
working for a company that has a good public
image and is constantly in the media for
positive reasons. Happy employees almost
always equal positive output.
Corporate Social Responsibility – Nonprofit
Organizations
How corporations embrace corporate social
responsibility is of great importance to
nonprofit organizations. Corporate giving
programs include matching gifts and volunteer
grants. These programs, which vastly increase
the positive impact corporations can have, are
vital to nonprofit organizations because they
are the ones receiving the monetary donations
and volunteer time.
Employee Matching Gift Programs
Corporations that offer matching gift programs
are essentially doubling donations that its
employees might give to eligible nonprofits.
For example, if an employee provides a $100
check to a non-profit organization of their
choice, an employer with a matching gift
program will write an additional $100 check,
thereby increasing total funds brought in!
Page 3 of 4
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 02
March 2015
Available online:http://internationaljournalofresearch.org/ P a g e | 194
It should come as no surprise that matching gift
programs increase employee engagement for
companies that offer these programs, but they
also help foster deeper non-profit/donor
relationships. If you’re looking to increase
fundraising from existing donors, matching gift
programs are a great place to start.
Employee Volunteer Grant Programs
Corporations that offer volunteer grants, or
even offer paid time off to volunteer at non- profit organizations, are bringing in helping
hands to eligible non-profit organizations. For
example, a corporation might offer a $250
check to a non-profit once an employee has
volunteered at least 10 hours with the
organization.
These corporate giving programs are a win-win
for both parties involved, and a huge reason
why corporate social responsibility is important
to nonprofits!
Corporate Partnerships
Another positive impact corporate social
responsibility has on non-profit organizations
is the possibility of corporate partnerships.
These partnerships are vital to the positive
impact a corporation has on its local
community, and important to a non-profit that
may not have the resources for major
marketing campaigns. Long term
corporate/non-profit partnerships can benefit
everyone.
For a corporation, a partnership with a local or
national non-profit organization improves the
company’s image in the public eye, as
consumers can clearly see the positive impact a
corporation is having on their community. A
key benefit is that it makes it easier for
consumers to trust a company.
For a non-profit organization, a partnership
with a local or national corporation puts its
name on tons of marketing materials that
otherwise could not have been afforded on
tight budgets. A key benefit is the partnership
brings additional awareness to the non-profit’s
cause.
Many of the highly ranked CSR programs on
the Havas list predictably feature green
initiatives, often, as with Leroy Merlin,
highlighting how the company’s own
employees personally volunteer in repair and
recycling efforts around the world. Here too,
with this volunteerism, we’re a long way from
the passive check-writing that defined the old
CSR. The message to consumers is, again,
personal. Since people commit themselves,
their own time and sweat, to these
responsibility programs, it’s no reach to infer
that they do the same when they manufacture
the home improvement products that have a
direct impact on our lives.
In a report, Research found that “the closer the
company’s business is related to consumer
electronics, the higher its CSR score.”
Companies like IBM, HP, and Texas
Instruments topped the charts for transparency
and reported results. For starters, their
sustainability initiatives have impressed
consumers, the report suggests.
These sector-leading companies have pushed
hard to highlight their greater focus on
enhanced sustainable design, manufacturing,
distribution, use, and end-of-use management.
The message is, our products are socially
responsible across a broad spectrum of
consumer needs, beginning with the benign
impact they have on the world in which they’re
used.
In turn, that message rivets consumer attention
on the products themselves and encourages the
compelling supposition that responsibly
manufactured products are simply better
products.
Conclusion
“Businesses must reconnect company success
with social progress”, Arguments exist that
support the view that firms which have solid
financial performance have more resources
