IDEAS home Printed from https://ideas.repec.org/a/wly/corsem/v18y2011i5p263-274.html
   My bibliography  Save this article

Does corporate social responsibility influence profit margins? a case study of executive perceptions

Author

Listed:
  • Atle Blomgren

Abstract

The literature on the business case for Corporate Social Responsibility (CSR) has identified possible mechanisms for CSR to increase profits. Other parts of the CSR literature argue that any strategy yielding above‐average profits will be imitated by competitors and profits driven down to industry average; consequently, CSR may only be a strategy for achieving average profits. The empirical research on the relationship between CSR and profits, consisting mostly of quantitative studies, has thus far proved inconclusive and many studies are challenged on methodological grounds. This paper presents the results of interviews with senior executives of 15 of the largest textile companies on the Norwegian market. The aim of the paper is to investigate the relationship between CSR and profits while avoiding the most important methodological pitfalls of the quantitative research and acknowledging the distinction between CSR as a strategy for achieving average profits and as a strategy for achieving above‐average profits. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.

Suggested Citation

  • Atle Blomgren, 2011. "Does corporate social responsibility influence profit margins? a case study of executive perceptions," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 18(5), pages 263-274, September.
    • Handle: RePEc:wly:corsem:v:18:y:2011:i:5:p:263-274
    DOI: 10.1002/csr.246
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/csr.246
    Download Restriction: no
    File URL: https://libkey.io/10.1002/csr.246?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sandra A. Waddock & Samuel B. Graves, 1997. "The Corporate Social Performance–Financial Performance Link," Strategic Management Journal, Wiley Blackwell, vol. 18(4), pages 303-319, April.
    2. Navarro, Peter, 1988. "Why Do Corporations Give to Charity?," The Journal of Business, University of Chicago Press, vol. 61(1), pages 65-93, January.
    3. Cheryl Rodgers, 2010. "Sustainable entrepreneurship in SMEs: a case study analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 17(3), pages 125-132, May.
    4. Tobias Hahn & Mandy Scheermesser, 2006. "Approaches to corporate sustainability among German companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 13(3), pages 150-165, July.
    5. Besley, Timothy & Ghatak, Maitreesh, 2007. "Retailing public goods: The economics of corporate social responsibility," Journal of Public Economics, Elsevier, vol. 91(9), pages 1645-1663, September.
    6. Martin Fougère & Nikodemus Solitander, 2009. "Against corporate responsibility: critical reflections on thinking, practice, content and consequences," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 16(4), pages 217-227, July.
    7. Abagail McWilliams & Donald Siegel, 2000. "Corporate social responsibility and financial performance: correlation or misspecification?," Strategic Management Journal, Wiley Blackwell, vol. 21(5), pages 603-609, May.
    8. Kjetil Telle, 2006. "“It Pays to be Green” – A Premature Conclusion?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 35(3), pages 195-220, November.
    9. Stuart L. Hart & Gautam Ahuja, 1996. "Does It Pay To Be Green? An Empirical Examination Of The Relationship Between Emission Reduction And Firm Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 5(1), pages 30-37, March.
    10. Scott J. Callan & Janet M. Thomas, 2009. "Corporate financial performance and corporate social performance: an update and reinvestigation," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 16(2), pages 61-78, March.
    11. Jean Tirole, 2006. "The Theory of Corporate Finance," Post-Print hal-00173191, HAL.
    12. Brekke, Kjell Arne & Nyborg, Karine, 2008. "Attracting responsible employees: Green production as labor market screening," Resource and Energy Economics, Elsevier, vol. 30(4), pages 509-526, December.
    13. Abagail McWilliams & Donald S. Siegel & Patrick M. Wright, 2006. "Corporate Social Responsibility: Strategic Implications," Journal of Management Studies, Wiley Blackwell, vol. 43(1), pages 1-18, January.
    14. Robert L. Engle, 2007. "Corporate social responsibility in host countries: a perspective from American managers," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 14(1), pages 16-27, February.
    15. Paul R. Portney, 2008. "The (Not So) New Corporate Social Responsibility: An Empirical Perspective," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 261-275, Summer.
    16. Gerusa Giménez Leal & Martí Casadesús Fa & Jaume Valls Pasola, 2003. "Using environmental management systems to increase firms' competitiveness," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 10(2), pages 101-110, June.
    17. David Murillo & Josep Lozano, 2006. "SMEs and CSR: An Approach to CSR in their Own Words," Journal of Business Ethics, Springer, vol. 67(3), pages 227-240, September.
    18. David J. Collison & George Cobb & David M. Power & Lorna A. Stevenson, 2008. "The financial performance of the FTSE4Good indices," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 15(1), pages 14-28, January.
    19. Elsayed, Khaled & Paton, David, 2005. "The impact of environmental performance on firm performance: static and dynamic panel data evidence," Structural Change and Economic Dynamics, Elsevier, vol. 16(3), pages 395-412, September.
    20. Ivar Kolstad, 2007. "Why Firms Should Not Always Maximize Profits," Journal of Business Ethics, Springer, vol. 76(2), pages 137-145, December.
    21. Amy J. Hillman & Gerald D. Keim, 2001. "Shareholder value, stakeholder management, and social issues: what's the bottom line?," Strategic Management Journal, Wiley Blackwell, vol. 22(2), pages 125-139, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Emmanuel Lawal & Gökan May & Bojan Stahl, 2017. "The Significance of Corporate Social Disclosure for High‐Tech Manufacturing Companies: Focus on Employee and Community Aspects of Sustainable Development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(4), pages 295-311, July.
    2. Selin Türkel & Ebru Uzunoğlu & Melike Demirbağ Kaplan & Beril Akıncı Vural, 2016. "A Strategic Approach to CSR Communication: Examining the Impact of Brand Familiarity on Consumer Responses," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(4), pages 228-242, July.
    3. Rainer Lueg & Maria Medelby Pedersen & Søren Nørregaard Clemmensen, 2015. "The Role of Corporate Sustainability in a Low‐Cost Business Model – A Case Study in the Scandinavian Fashion Industry," Business Strategy and the Environment, Wiley Blackwell, vol. 24(5), pages 344-359, July.
    4. Víctor Amor‐Esteban & Ma‐Purificación Galindo‐Villardón & Isabel‐María García‐Sánchez & Fátima David, 2019. "An extension of the industrial corporate social responsibility practices index: New information for stakeholder engagement under a multivariate approach," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(1), pages 127-140, January.
    5. Andrew S. Manikas & James R. Kroes, 2018. "The relationship between lean manufacturing, environmental damage, and firm performance," Letters in Spatial and Resource Sciences, Springer, vol. 11(2), pages 141-155, July.
    6. Borko Mihajlović, 2020. "The Role of Consumers in the Achievement of Corporate Sustainability through the Reduction of Unfair Commercial Practices," Sustainability, MDPI, vol. 12(3), pages 1-20, January.
    7. Henning Madsen & John P. Ulhøi, 2016. "Corporate Environmental Initiatives in Small and Medium Sized Enterprises and Their Outcomes: A Longitudinal Study," Business Strategy and the Environment, Wiley Blackwell, vol. 25(2), pages 92-101, February.
    8. Bert Scholtens & Feng‐Ching Kang, 2013. "Corporate Social Responsibility and Earnings Management: Evidence from Asian Economies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(2), pages 95-112, March.
    9. Jung-Fa Tsai & Phi-Hung Nguyen & Ming-Hua Lin & Duy-Van Nguyen & Hsu-Hao Lin & Anh-Tuan Ngo, 2021. "Impacts of Environmental Certificate and Pollution Abatement Equipment on SMEs’ Performance: An Empirical Case in Vietnam," Sustainability, MDPI, vol. 13(17), pages 1-17, August.
    10. Yan Jiang & Le Luo, 2018. "Market reactions to environmental policies: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(5), pages 889-903, September.
    11. Dolors Setó‐Pamies, 2015. "The Relationship between Women Directors and Corporate Social Responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(6), pages 334-345, November.
    12. Debbie Haski‐Leventhal, 2013. "Employee Engagement in CSR: The Case of Payroll Giving in Australia," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(2), pages 113-128, March.
    13. Liyanage Chamila Roshani Perera & Jayawickrama Withanage Dushan Chaminda, 2013. "Corporate Social Responsibility and Product Evaluation: The Moderating Role of Brand Familiarity," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(4), pages 245-256, July.
    14. Donald G. Gardner & Vathsala Wickramasinghe, 2023. "Relationships between Leadership Styles and Prosocial Motivation Depend on Cultural Values: A Case Study in Sri Lanka," Merits, MDPI, vol. 3(3), pages 1-14, July.
    15. Daniel Kiel & Julian M. Müller & Christian Arnold & Kai-Ingo Voigt, 2017. "Sustainable Industrial Value Creation: Benefits And Challenges Of Industry 4.0," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 21(08), pages 1-34, December.
    16. Esben Pedersen & Wencke Gwozdz, 2014. "From Resistance to Opportunity-Seeking: Strategic Responses to Institutional Pressures for Corporate Social Responsibility in the Nordic Fashion Industry," Journal of Business Ethics, Springer, vol. 119(2), pages 245-264, January.
    17. Alberto Romolini & Silvia Fissi & Elena Gori, 2014. "Scoring CSR Reporting in Listed Companies – Evidence from Italian Best Practices," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 21(2), pages 65-81, March.
    18. Monowar Mahmood & Janet Humphrey, 2013. "Stakeholder Expectation of Corporate Social Responsibility Practices: A Study on Local and Multinational Corporations in Kazakhstan," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(3), pages 168-181, May.
    19. Federica Doni & Marco Fiameni, 2024. "Can innovation affect the relationship between Environmental, Social, and Governance issues and financial performance? Empirical evidence from the STOXX200 index," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 546-574, February.
    20. Francisco J. García‐Rodríguez & José León García‐Rodríguez & Carlos Castilla‐Gutiérrez & Silvério A. Major, 2013. "Corporate Social Responsibility of Oil Companies in Developing Countries: From Altruism to Business Strategy," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(6), pages 371-384, November.
    21. Gutama Kusse Getele & Tieke Li & Tsitaire Jean Arrive, 2020. "Corporate culture in small and medium enterprises: Application of corporate social responsibility theory," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 897-908, March.
    22. Karen Maas & Sanne Rosendaal, 2016. "Sustainability Targets in Executive Remuneration: Targets, Time Frame, Country and Sector Specification," Business Strategy and the Environment, Wiley Blackwell, vol. 25(6), pages 390-401, September.
    23. Shihping Kevin Huang, 2013. "The Impact of CEO Characteristics on Corporate Sustainable Development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(4), pages 234-244, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oberndorfer, Ulrich & Schmidt, Peter & Wagner, Marcus & Ziegler, Andreas, 2013. "Does the stock market value the inclusion in a sustainability stock index? An event study analysis for German firms," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 497-509.
    2. Andreas Ziegler, 2012. "Is it Beneficial to be Included in a Sustainability Stock Index? A Panel Data Study for European Firms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(3), pages 301-325, July.
    3. Scott J. Callan & Janet M. Thomas, 2014. "Relating CEO Compensation to Social Performance and Financial Performance: Does the Measure of Compensation Matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 21(4), pages 202-227, July.
    4. Urs von Arx & Andreas Ziegler, 2008. "The Effect of CSR on Stock Performance: New Evidence for the USA and Europe," CER-ETH Economics working paper series 08/85, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    5. Scott J. Callan & Janet M. Thomas, 2011. "Executive compensation, corporate social responsibility, and corporate financial performance: a multi‐equation framework," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 18(6), pages 332-351, November.
    6. Maria J. Charlo & Ismael Moya & Ana M. Muñoz, 2017. "Sustainable Development in Spanish Listed Companies: A Strategic Approach," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(3), pages 222-234, May.
    7. Hajer Tebini & Bouchra M’Zali & Pascal Lang & Paz Méndez-Rodrı́guez, 2015. "Social Performance and Financial Performance: A Controversial Relationship," International Series in Operations Research & Management Science, in: Enrique Ballestero & Blanca Pérez-Gladish & Ana Garcia-Bernabeu (ed.), Socially Responsible Investment, edition 127, chapter 0, pages 53-73, Springer.
    8. Bongani Munkuli & Renee Horne, 2018. "Financial Markets Value Reputation for Corporate Social Responsibility (CSR) – A Study of the South African Mining Sector," Africagrowth Agenda, Africagrowth Institute, vol. 15(2), pages 17-22.
    9. Shafat Maqbool, 2019. "Does corporate social responsibility lead to superior financial performance? Evidence from BSE 100 index," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 46(3), pages 219-231, September.
    10. Giovanna Michelon & Giacomo Boesso & Kamalesh Kumar, 2013. "Examining the Link between Strategic Corporate Social Responsibility and Company Performance: An Analysis of the Best Corporate Citizens," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(2), pages 81-94, March.
    11. Soh Young In & Young Joon Lee & Robert G. Eccles, 2024. "Looking back and looking forward: A scientometric analysis of the evolution of corporate sustainability research over 47 years," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 2225-2259, May.
    12. Karine Nyborg & Tao Zhang, 2013. "Is Corporate Social Responsibility Associated with Lower Wages?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(1), pages 107-117, May.
    13. Scott J. Callan & Janet M. Thomas, 2009. "Corporate financial performance and corporate social performance: an update and reinvestigation," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 16(2), pages 61-78, March.
    14. Urs von Arx & Andreas Ziegler, 2014. "The effect of corporate social responsibility on stock performance: new evidence for the USA and Europe," Quantitative Finance, Taylor & Francis Journals, vol. 14(6), pages 977-991, June.
    15. Markus Hang & Jerome Geyer‐Klingeberg & Andreas W. Rathgeber, 2019. "It is merely a matter of time: A meta‐analysis of the causality between environmental performance and financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 28(2), pages 257-273, February.
    16. Franck Brulhart & Sandrine Gherra & Bertrand V. Quelin, 2019. "Do Stakeholder Orientation and Environmental Proactivity Impact Firm Profitability?," Journal of Business Ethics, Springer, vol. 158(1), pages 25-46, August.
    17. Hayam Wahba, 2010. "How do institutional shareholders manipulate corporate environmental strategy to protect their equity value? A study of the adoption of ISO 14001 by Egyptian firms," Business Strategy and the Environment, Wiley Blackwell, vol. 19(8), pages 495-511, December.
    18. Deepa Sharma & Suman Chakraborty & Ashwath Ananda Rao & Lumen Shawn Lobo, 2023. "The Relationship of Corporate Social Responsibility and Firm Performance: A Bibliometric Overview," SAGE Open, , vol. 13(1), pages 21582440231, March.
    19. Tai-Hsi Wu & Hsiang-Lin Chih & Mei-Chen Lin & Yi Hua Wu, 2020. "A Data Envelopment Analysis-Based Methodology Adopting Assurance Region Approach for Measuring Corporate Social Performance," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 148(3), pages 863-892, April.
    20. Markus Kitzmueller, 2008. "Economics and Corporate Social Responsibility," Economics Working Papers ECO2008/37, European University Institute.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:corsem:v:18:y:2011:i:5:p:263-274. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)1535-3966 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.