Managing corporate performance

Abstract

Purpose -Corporate social responsibility is important and fundamental to the sustainable operations of corporations. Similarly financial performance is undoubtedly fundamental to the continuing operating of any corporation. This paper aims to investigate the relationship between corporate social responsibility and firm financial performance. Design/methodology/approach -The main part of this paper is based upon an exploration of the relationship between corporate social responsibility and financial performance in developing countries. The authors do this by investigating the Istanbul Stock Exchange (ISE) 100 index companies and their social responsibility policy and financial indicators. The relationship between CSR and financial performance is empirically examined between 2005 and 2007 with different approaches and measurement methods. The authors show that some causality is related to lagging between periods for financial performance and CSR. Based upon previous empirical studies, this study conducts the analysis based on the assumption that there may be a relationship between firm size, profitability, risk level and CSR. Findings -In doing this analysis the authors found a relationship between firm size and corporate social responsibility. However the authors were not able to find any significant relationship between corporate social responsibility and financial performance/profitability. Research limitations/implications -The paper has implications in enhancing the understanding of performance management through understanding the relationship between corporate social responsibility and financial performance particularly in a developing country, although it is necessarily limited by the size of the sample. Originality/value -This paper increases the understanding of the relationship between corporate social responsibility and financial performance. This research is also the first research that has examined Turkish companies.

Corporate Social Responsibility and Firm Performance: Evidence from an Emerging Market

“…In one of the few studies investigating CSR-financial performance relationship in Turkey, Aras, Aybars, and Kutlu (2010) analyze the companies in the ISE-100 index for the years 2005-2007 and document a positive relationship between CSR disclosure and firm size. However, no significant relationship between CSR and financial performance is reported.…”

“…Corporate social responsibility is analyzed based on seven distinct dimensions: environment, energy, consumer, community involvement, employee health and safety, other employee-related issues, and general (Aras, Aybars, and Kutlu (2010)). We use three units for our analysis: the number of sentences devoted to CSR on the annual report, the number of pages related to CSR, and the number of the CSR dimensions mentioned based on the seven categories.…”

Corporate social responsibility and financial performance relationship: a review of measurement approaches

“…A relatively simple way of coding is counting words or sentences (Aras, Aybars, & Kutlu, 2010) in reports and publications on the specific CSR issue under consideration (e.g., CO 2 reduction) and assigning binary variables ('0' and '1') if a particular issue is mentioned. If several dimensions of CSR are being appraised, a binary score can be assigned to each dimension and then an integrated score can be determined (Abbott & Monsen, 1979).…”

Impacto do Disclosure Voluntário: Valor da Empresa e Informações Socioambientais nas Companhias Abertas

“…O resultado desta pesquisa corrobora outros estudos que realizaram a mesma análise nos mercados norte-americano e turco (Aras, Aybars & Kutlu, 2010;Plumlee et al, 2015).…”