Introduction:
The past three weeks have been so beneficial and rewarding as they have provided solid foundation in financial reporting in particular, ethical behavior and as it related to accountants and Managers, accounting for leases, fair value accounting, consolidation and accounting for intangible assets. It is interesting to note that there are discussion around recognition of internally generated intangible assets in the financial statement, during the past weeks, the pros and coins of this concept were thoroughly considers and discussed. Though not fully developed in Nigeria, the importance of disclosure of corporate responsibility and sustainability initiatives to stakeholders cannot be over emphasized. For instance, it enables organizations to measure and interpret the effects of their operations on the environment so as to establish greater credibility with its stakeholders.
With this thought in mind, this paper reviews Rim et al. (2009) article on Causality between Corporate Performance and Financial Performance: Evidence from Canadian Firms. It provides an overview of the article content, the research question, methodology, data and conclusion. In addition, the authors’ opinion is evaluated for a position using additional references.
Overview of the article
Rim et al. (2009) articles assessed the causal relationship between corporate social performance (CSP) and financial performance (FP) by performing a detailed analysis of 179 sampled publicly quoted Canadian firms using the Granger causality approach. Granger causality is a statistical analysis model developed by Granger (1969) and based on prediction that determines the usefulness of one time series in forecasting another. According to Granger (1969, p...
... middle of paper ...
...cially responsible”. Companies sometimes engaged in corporate responsibility to improve their efficiencies and enhance their brand which may ultimately result into profitability through attracting new customers. For examples, companies such as shell BP, General Electric, IBM, Google, etc., gained competitive edge through corporate sustainability. A study of Korean companies by Choi et al.(2010, p.293) indicates significant and positive relationship between CSR and financial performance . The importance of CSR explains why about “three quarter of Global Fortune 250 companies surveyed during 2007–2008 have a publicly communicated CSR strategy that includes defined objectives … and nearly 30% of surveyed global executives consider CSR as the highest priority issue for their organizations with a further 40% assigning it high priority” (Choi et al.,2010, p.293).
Orlitzky, M, Schmidt, F & Rynes, S 2003, ‘Corporate social and financial performance: A meta analysis’, Organization Studies, vol. 24, no. 3, pp 403-11.
Windsor, D. (2001). The future of corporate social responsibility. International Journal of Organizational Analysis, 9 (3): 225-256.
Corporate Social Responsibility (CSR) is a movement that aims to promote a greater awareness of how business activities and decisions influence corporate environment, stakeholders, and society in general. Adam Lindgreen and Valerie Swaen’s article “Corporate Social Responsibility” addresses this broad topic in a more narrow direction of CSR implementation as it discusses the most important stages of this process. While this article relies only on the previous research, it provides unique insights into CSR and even challenges the common views of this concept as the authors thoroughly analyze their secondary sources.
Corporate social responsibility (CSR) invaded the corporate world over the last few decades. This concept has become an essential need for competitive advantage unlike its original role as a nicety. The companies have seen the business benefit of the initiative and stakeholders have appreciated the initiative. This has led to the wide application in the firm’s operational agenda.
There is major concern for corporate management whether there is a direct relationship between corporate social responsibility and financial performance. There is need for assessing the validity of the relationship between CSR and financial performance .Macguire, sundgren and schneweels (1986) argued that previous research has yielded mixed results regarding the relationship between CSR and measures of financial performance. Reviews by Cochran and Wood (1984) and Ullman have all found mixed results regarding the relationship between CSR and a firm’s financial performance. Ullman suggested that the results may have been derived from differences in research methodologies and measures of financial performance
Corporate Social Responsibility is the obligation from corporations to utilize their resources to aid and benefit the larger society. The four components of CSR are economic, legal, ethical, and philanthropic. Social Responsibility is a fundamental force in the wealth creation process. If correctly demonstrated, CSR should heighten competitiveness and boost the value of wealth creation to society. A company's CSR Initiatives directly represent who the company is and what it believes it. The m...
Griffin, Jennifer, and John Mahon. 1997. The corporate social performance and corporate financial performance debate: Twenty-five years of incomparable research. Business and Society 36(1): 5–31.
Corporate Social Responsibility (CSR) is the way a corporation achieves a balance between its economic, social, and environmental responsibilities in its operations so as to address shareholder and other stakeholder expectations. In general, when firms hold this wider encouraging role on the public by being engaged with stakeholders, a variety of profit can be produced for both company and the stakeholders. A key inclination is the combination of Corporate Social Responsibility (CSR) into the organization strategy, culture, mission and communications. By incorporating corporate citizenship into the company it is no longer an additional “nice thing to do” or something made to obey laws or regulations. Instead, corporate responsibility has become something business leaders and workforce want to engage in, frequently because executives who believe in the long-term see business profit. The four types of social responsibilities a...
The current global economy has not only increased the supply of ample products based on consumers’ demands, but it has also increased competitiveness among the companies to spread their influence over the international market. The strategy used by the companies to stand out more than the others is by fortifying the element of Corporate Social Responsibility in their organization.
It is also expected to be socially responsible, by investing in the corporate and social development of Nigeria…” (Nigerian National Planning Commission 2004).
An organization’s Corporate Social Responsibility (CSR) drives them to look out for the different interests of society. Most business corporations undertake responsibility for the impact of their organizational pursuits and various activities on their customers, employees, shareholders, communities and the environment. With the high volume of general competition between different companies and organizations in varied fields, CSR has become a morally imperative commitment, more than one enforced by the law. Most organizations in the modern world willingly try to improve the general well-being of not only their employees, but also their families and the society as a whole.
Corporate Social Responsibility (CSR) is a very familiar term in today’s world. Most of the successful companies try to be ethical and socially responsible toward their stakeholders. Because becoming ethical and socially responsible gains a lot in terms of profit or capturing more market share (Aras and Crowther,2009). This socially responsible approach is paved by the CSR activities of the companies which has a great contribution to their corporate strategy of winning the customers’ mind. In this assignment, the pros and corn of CSR activities of a particular organization a...
A corporations CSR should be shaped in order to fit the goals of the corporation, although every corporation’s CSR should differ, since most have different goals and different communities behind them. The CSR should be molded into fitting the corporation’s goals in order to make it easier on the corporation in giving back to the community while achieving its goals. For example, a corporation located in a desert wishes to be more efficient, by reducing water usage it is not only creating lower costs, which result in higher revenue, but also helps the community by not taking up so much water. Taking this into consideration, it is critical that the corporation goals and values are established and clear throughout the corporation, they should be developed by the board or directors and CEO, and the highest managerial level should stress their importance to the rest of the corporation. By making the goals and values at the top branch of the corporate hierarchy, it will be simpler for the corporates community to develop in order to nurture those goals and values. Therefore, a corporation can reach the “shared-value,” a value for both its shareholders and community in a simpler manner that can result benefiting the corporation in the end as well. Throughout the article many examples are given of actual corporations that have benefited and changed their CSR in order to fit their goals, therefore, providing solid proof that these methods work. Nevertheless, as acknowledged by the author’s themselves, most of the corporations taken into consideration where one’s that Harvard CSR students were employed
It is important to understand the importance of corporate social responsibilities. If Corporate Social Responsibility is properly maintained and emphasized by companies, it can benefit the society, economy and corporate sustainability. It can also be cost efficient to companies. also the environment . But above all effect (CSR) varies companies to companies. Where some corporates seem to make all sorts of benefits from their coporate social responsibilities but few of them are also having loss by trying to maintain CSR without properly evaluating their resources. (Porter and Kramer 2006) has said The inferences where corporates need to evaluate their CSR actions to figure out if they add
Now-a-days it is considered that CSR is one of the major concerns of organization’s business ethics. Companies increasingly increase their corporate social responsibility (CSR) and ethical management accepting the positive impact on the bottom line. The vast bulk of Standard & Poor’s 500 companies publish sustainability reports unfolding their program challenges and achievements. These pre-emptive efforts can pr...