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To what extent do companies benefit - Essay Example

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To what extent do companies benefit

Such actions suggest that corporations will increasingly be held accountable for activity of concern to multiple stakeholder groups. As a result there will likely be a renewed interest in identifying the dimensions and consequences of corporate social responsibilities.
Cameron has suggested that multiple perspectives of organizational effectiveness exist and that "consensus regarding the best, or sufficient, set of indicators of effectiveness is impossible to obtain" (1986: 541). The same arguments can be made regarding social performance as a specific aspect of overall corporate performance. Social responsibility continues to be a poorly defined as well as difficult to measure concept. There appears to be no real agreement as to what constitutes social performance. What is indicated, however, is the need to apply measures which address multiple criteria of social performance. This study attempts to specify the underlying dimensions of a multiple measure of corporate social responsibility and investigate the relationship between corporate social performance and multiple measures of financial performance. For the purposes of this study, corporate social performance represents a measure of a firm's attentiveness to multiple stakeholder groups. ...
This perspective generally cast corporate activity as a zero-sum game. Whatever resources were expended in the interests of social responsibility came at the expense of shareholders (Wartick and Cochran, 1985). The interests of shareholders and other stakeholders were defined implicitly as conflicting and mutually exclusive.
Many criticisms have been leveled at this perspective and it seems safe to conclude that corporations are no longer viewed, even theoretically, as solely economic institutions (Sharfman, 1992). At a very minimum, there appears to be a consensus that firms serve multiple constituencies and stakeholder groups whose memberships are overlapping and whose interests are interdependent (Aram, 1989; Freeman, 1984; Nash, 1990). An understanding of such relationships and an attendant concern for the interests of all stakeholder groups may force firms to act in a socially responsible way regardless of their motivation (Sen, 1993).
Out of these perspectives come varied hypotheses regarding the relationship between social responsibility and corporate economic performance. When corporations are viewed as economic institutions, a negative relationship between social responsibility and profitability is assumed (Ullmann, 1985). The opposing hypothesis suggests a positive relationship between social responsibility and performance. Proponents of this perspective argue that socially concerned management is likely to also possess the skills necessary to achieve superior financial performance (Alexander and Buchholz, 1978; Metzger et al., 1993). A final perspective hypothesizes an inverted U-shaped correlation between social and economic performance. To an ...Show more


Corporate social responsibility as an area of scientific inquiry has received little attention in the popular and academic press during the last decade. Efforts to investigate social responsibility and its relationship to corporate performance have been frustrated by a lack of adequate operationalizations and measures of social responsibility…
Author : laurianepurdy
To what extent do companies benefit essay example
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