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corporate social responsibility
Finance & Accounting
Pages 5 (1255 words)
Corporate Social Responsibility and Accounting Theories Corporate Social Responsible (CSR) disclosures have remained a research agenda for many years. The stimulation behind research of CSR is, in essence, a hope that society would benefit from it. Relationship between Corporate Financial Performance (CFP) and Corporate Social Responsibility (CSR) has been examined for the past 30 years, yet consistent evidence has not been found for a clear objective of companies for getting involved in the practices of CSR.
CSR Theories Corporate social responsibility reflects the responsibilities that firm have towards stakeholders and society. Corporations are often encountered with business choices that create a dilemma between their objective of maximizing profits and ethics. There are a few theories of CSR that provide the foundation to the CSR model for the implementation of the process. Political theory According to this theory of CSR, corporations have power in society at the same time, they are responsible to use this power in the arena of politics. This theory emphasizes on connection and interaction between society and corporation as well as the power it holds. This theory can be utilized by corporations for enhancing their reputation in a positive manner. If corporations are powerful enough, then they must utilize their power in the interest of general public as well. Manipulating financial statements and hiding environmental information that might harm their profits is not ethical by any means. Instrumental Theory This theory states that corporations are instruments for the creation of wealth. ...
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