Finding and Contribution sample essay
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 relationship between CSP and CFP, bottom line decision making may create barriers to outcomes desired by the public. Meta-analysis is a statistical technique for combining the findings from independent studies.By using meta-analysis, researchers can test and identify those areas which are being related by other studies and authorize them. Furthermore, for those unexplained inconsistence from across studies remains relatively large and needed further requirement to identify moderators which can be shown in the analysis as well. In the managerial point of view, market environments will not punish the company if they are in highly corporate social performance.
Therefore, the managers can practice social responsibility strategies. (Prasertsang & Ussahawanitchakit, 2011) Corporate social responsibility strategy refers to managers’ awareness of public policy, social care, surrounding organization responsibility for society and natural of the environment both internal and external organization. “Internal” is well-being of employees, safety and supporting education whereas “external” is responses to the need of customers such as research and development for the high quality of product and service by reducing waste, energy consumption and the pollution that might arise from the production processes. Top managers must use CSP like a reputation level and pay more attention on other party’s perceptions about their organizations. Moreover, they need to know whether they are currently under study of any market analyst, public interest group or the media. A company which highly in CSP can get extra return from receiving public endorsement from federal agencies.
Generally, by using quantitative research, this article is trying to show that the prevailing trend claim that we are lack of generalizable knowledge about CSP and CFP which is built on unstable base. The particular objectives of this meta-analysis include providing a statistical integration of the accumulated research on the relationship between CSP and CFP. As well as, assessing the relative predictive validity of instrumental stakeholder theory in the context of that relationship between CSP and CFP and examine several moderators, such as operationalization of CSP and CFP, and timing of CSP and CFP measurement as well. The meta-analysis was built on earlier researches by including market return measures in addition to accounting return, CSP measures other than social responsibility audits performed by Kinder, Lydenberg, Domini & Co., Inc.
Moreover, It responses to Waddock and Graves’s call for research on the temporal consistency of results, independent of the time lag chosen between CSP and CFP. Furthermore, it integrates empirical results across diverse study contexts and enabling them to look for theoretical moderators and statistical artefacts that might explain the highly variable results across other previous studies. Author provides a methodologically stricter review than other studies in the past 30 years.
The meta-analysis findings suggest that corporate virtue in the form of social responsibility such as public policy, social care, well-being of employees, etc… Firmly the performance of the corporate is affected by their managerial strategies and activities in market and non-market environments. Some firms choose the solution for CSP by motivating and using “ecological” but still practice profit maximization and shareholder profit maximization. Additionally, this article introduces a meta-analysis review of primary quantitative studies of the relationship between CSP and CFP. The particular objectives of this meta-analysis include providing a statistical integration of the accumulated research on the relationship between CSP and CFP
Frooman, J., 1997. Socially irresponsible and illegal behavior and shareholder wealth: A meta-analysis of event studies. Business & Society, Volume 36, pp. 221-249. Prasertsang, S. & Ussahawanitchakit, P., 2011. Corporate Social Responsibility Strategy, Marketing Performance and Marketing Sustainability: An Empirical Investigation of ISO 14000 Businesses in Thailand. International Journal of Business Strategy, Volume 11, pp. 60-72. Soana, M.-G., 2011. The Relationship Between Corporate Social Performance and Corporate Financial Performance in the Banking Sector. [Online] Available at: http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=f80d931a-37b8-4dd8-a174-3d913ffdac87%40sessionmgr15&vid=5&hid=10 [Accessed 3 July 2012].
Waddock, S. A. &. G. S. B., 1997. The corporate social performance–financial performance link. Strategic Management Journal, Volume 18, p. 303–319.
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