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1 - A corporate social responsibility–corporate financial performance behavioural model for employees

Published online by Cambridge University Press:  05 June 2012

N. Craig Smith
Affiliation:
INSEAD, Fontainebleau, France
C. B. Bhattacharya
Affiliation:
European School of Management, Berlin
David Vogel
Affiliation:
University of California, Berkeley
David I. Levine
Affiliation:
University of California, Berkeley
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Summary

Introduction

Today's CEOs are under pressure to address pervasive environmental, social and ethical issues. Companies are held accountable for the direct and indirect consequences of their actions and face a plethora of issues such as ensuring environmental sustainability and sound labour practices, sourcing skilled employees in areas with limited educational systems, ensuring the respect of workers' rights and meeting the needs of the world's poor. A vast range of activities now comes under the corporate social responsibility umbrella: ‘from volunteering in the local community to looking after employees properly, from helping the poor to saving the planet’. According to a 2007 McKinsey global survey, managers consider that society has greater expectations for business to take on public responsibilities than it had five years ago.

The existence of a positive relationship between corporate social responsibility (CSR) and corporate financial performance (CFP), however, remains considered by many as a necessary condition to justify the managerial relevance of the CSR concept. As Michael Porter observed:

Although there is a lot of feeling that ‘we ought to do it’ amongst analyst executives and a lot of corporate statements about companies' social ambition and efforts, there are also a lot of uncomfortable sentiments about why companies should be doing it. Corporate leaders are now giving lip service to this area [corporate social responsibility], but they do not ultimately understand it. No matter what they say in public, when you get behind the scenes with executives and directors, they will ask you ‘why should we invest in social initiatives?’ […]

Type
Chapter
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Publisher: Cambridge University Press
Print publication year: 2010

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