Does Corporate Social Responsibility (CSR) Impact on Firm Performance? A Literature Evidence
31 Pages Posted: 16 Aug 2010
Date Written: August 16, 2010
The shouldering of social responsibility by firms is an issue that continues to generate mixed considerations, debates and thoughts by different subsets of the corporate world and the academia. The proponents argue that “it fosters and promotes ethical behavior by managers, and this has a positive impact on firm reputation”. In other words, shouldering social responsibilities is a feeder to corporate reputation. However, opponents of CSR “claim that it is expensive and inconsistent with the preeminent goal of maximizing shareholder return.” To these opponents this paper presents the case of the festering wound of Nigeria’s Niger Delta region so that they can clearly judge which is better: to stand on the side of society and the environment and still achieve a high shareholder value or to turn their back on society and risk public odium and the likelihood that shareholders would either risk their stake in the organization or engage perpetually in damage control activities while also remaining in the negative spotlight which is not good for business.
This writer reviews current literature on the subject and urges those who argue that CSR is not necessary to consider what has happened in Nigeria’s Niger Delta and the problems oil companies face in that region today. Today, a monster has been created in Nigeria’s Niger Delta region out of alleged neglects that good CSR policy and strategies would have nipped in the bud. Thus, for companies to survive in today’s world, they must be seen to act in society’s best interests.
Keywords: Corporate social responsibility, maximizing shareholder return, Nigeria’s Niger delta region, CSR policy & strategies, corporate social performance theory, shareholder value theory, stakeholder theory, corporate citizenship
Suggested Citation: Suggested Citation