Corporate Social Responsibility and Firms’ Performance: A Literature Review

Abstract

IntroductionCorporate social responsibility (CSR) is to a great extent a topic that has been on the increase and has become a very important topic that organizations and scholars are recently engaging in. though CSR has been very prevalent, scholars are yet arrive at a universally accepted definition for CSR. Glavas (2016) opined that most of the major corporate organizations are engaged in CSR in one form or the other even though according to him that scholars are yet to come up with one definition of CSR that is accepted globally. Various authors have attempted to define CSR among whom are Safarzad, Farahnaki, and Farahbakhsh (2017) who defined CSR concept as a requirement for a company that is legal and includes the continued commitment of the company towards the community. Carroll (2016) further stated in his pyramid that CSR is of four parts which represents the expectation of the society towards the firms and they are the economic, legal, ethical and philanthropic obligations which should be taken in sequence from the bottom to the top.CSR over the years has gained traction significantly as shown by the number of published research studies on the relationship between CSR and performance of companies (Demetraides & Auret, 2014;Oh &Park, 2015 andTaiwo &Adeniran 2014). According to Safarzad, et al (2017) the main goal of most corporate entities is often to increase the efficiency and productivity of their operations which will enable them to maximize profit for their shareholders which must be achieved by integrating the community's ethical and environmental expectations into the economic processes of the company. Attempts by authors to find out how CSR aids in the creation of value or destruction of businesses can be categorized according to their outcomes showed that there are positive, negative, or no significant relationships (Fomukong, 2014).