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To What Extent Is Corporate Social Responsibility (Csr) Beneficial to a Company’s Performance?

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To what extent is Corporate Social Responsibility (CSR) beneficial to a company’s performance?
An analysis of the relationship between CSR and financial soundness, quality of marketing, people management and long-term investment value.
Since the late 1990s, corporate social responsibility (CSR) has been increasingly discussed in the society and it slowly becomes one of the important components in the business world (Jenkins, 2005). McWilliams and Siegel (2006) interpret CSR as
‘situations where the firm goes beyond compliance and engages in “actions that appear to further some social good, beyond the interests of the firm and that which is required by law”’. In general, CSR is believed to, in long-term, enhance business performance and boost employee morale. Also, CSR could be a tool to improve company image and to prevent crises (Weber, 2008). This essay argues that CSR has a positive relationship with a company’s performance, meaning that it brings benefits to corporate performance to a large extent. To measure one’s performance, three key aspects are considered, namely financial soundness, quality of marketing and people management. These three aspects are chosen from the criteria for Britain's Most
Admired Companies 2014 (Management Today, 2014).
Effects of CSR on Financial Soundness
One of the most crucial criteria to determine a company’s performance is by analysing its financial soundness. Common indicators for financial performance are
Return of Assets (ROA), Return on Sales (ROS) and Return of Equity (ROE)
(Tsoutsoura, 2014). By using the Kinder Lydenberg Domini (KLD) rating system for the measurement of CSR, Tsoutsoura (2004) contends that the indicators mentioned have positive relationship with the KLD score.
Beyond from calculations, reality also shows socially responsible practices...

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