Relation between Corporate Social Responsibility and Corporate Financial Performance - Dissertation Example

Download file to see previous pages Contemporary corporations are facing several changes and challenges that continue to redefine and restructure the modern concept of corporations. Globalization, rapid developments in computer and information technology, and the current experience of global economic crunch are some of the essential elements affecting the growth and survival of modern organizations (Balakrishnan, 2003; Fischer, 2003; Soros, 2002; Bagwathi, 2010). Although there is no universal agreement regarding the effect of these developments and concerns relevant to the quality of life of people(Bagwathi, 2007; 2010; Stiglitz, 2007, 2010; Suarez-Orosco & Qin-Hilliard, 200; Yusoff, Ramayah & Ibrahim, 2010). Still, what remains, is the fact, that the socio-economic and political condition with which economic institutions are doing their activities are affected by these integral elements, in the same manner, that it has permeated and influenced the lives of people across the globe (Yusoff et al., 2010).

In this regard, modern corporations respond to the challenges and demands of the time by incorporating a fundamental change in the nature of the organization – corporate social responsibility (Zolsnai, 2006). The idea of corporate social responsibility is not something new (Hemingway, 2002). During the 1930s organizations have already recognized that their responsibility is not limited only to the satisfaction of the shareholders’ interests, but it also includes the fulfillment of the demands of the society where the organization is embedded (Hemingway, 2002). This seminal notion of corporate social responsibility is integrated into the current scheme and understanding of CSR, but it is only in the last three decades that an observable influx of discussion and interests regarding CSR has taken full swing (Dahlsrud, 2008).

However, in the last four years, the world experienced the first global economic crisis of the 21st century (Reinhart, 2008; Yandle, 2010). The case against CSR has been raised based on the assumption that the concept fails in responding to the challenges that it is supposed to be addressing (Karnani, 2010; Lin-Hi, 2010; Ludesher & Mashud, 2010; Portney, 2008). In this sense, there is a call to re-evaluate CSR and come up with a better approach towards an authentic CSR and not just a façade (Lin-Hi, 2010).

Background of the Study
The important role of CSR in the survival of companies in the contemporary period is an accepted truism. In fact, the notion of CSR is deemed intuitive in the sense that as companies are considered as social actors, it becomes essential that corporations too, should be responsible for their actions. However, the intuitiveness of the good derived out from doing good is questioned on the premise of whether there is really a connection between doing good and earning well in the context of an organization. ...Download file to see next pages Read More