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Corporate Social Responsibility: A Theory of the Firm Perspective
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Corporate Social Responsibility: A Theory of the Firm Perspective
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Corporate Social Responsibility: A Theory of the Firm Perspective
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Journal Article
Corporate Social Responsibility: A Theory of the Firm Perspective
2001
Overview
Managers continually encounter demands from multiple stakeholder groups to devote resources to corporate social responsibility (CSR). An important debate regarding the relationship between CSR and financial performance has been stimulated. A supply and demand model of corporate social responsibility is outlined. A hypothesis based on this framework is that a firm's level of CSR will depend on its size, level of diversification, research and development, advertising, government sales, consumer income, labor market conditions, and stage in the industry life cycle. From these hypotheses, it is concluded that there is an \"ideal\" level of CSR, which managers can determine via cost-benefit analysis, and that there is a neutral relationship between CSR and financial performance.
