Corporate Social Responsibility and Business Performance
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Corporate Social Responsibility and Business Performance

Theories and Evidence about Organizational Responsibility

Tobias Gössling

Does it pay for businesses to act morally? This book attempts to answer this question. Taking a positive approach, it demonstrates that, under certain conditions, organizations can act responsibly and profitably at the same time. It elaborates on these conditions and provides evidence for the assumed positive relation between responsibility and profitability.
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Chapter 5: CSR and Legitimacy: An Empirical Study About the Image Consequences of CSR Policies

Tobias Gössling


Introduction CSR is about the basic idea that businesses have to meet society’s expectations in their practices. Nowadays, businesses operate in an environment in which societal concerns have been raised to a considerable level. CSR can be seen as an obligation of the business world to be accountable to all of its stakeholders – not just its financial ones. This idea is far from new. To date, there is still no legally binding global code of conduct for multinational corporations or for foreign direct investment (Mah, 2004). This means that the practice of corporate social responsibility is still a largely voluntary act and subject to self-regulation. There are initiatives to come to international standards, like the UN Global Compact and the ISO 14001 environmental standard, but corporations can decide for themselves whether to adhere to them or not. Furthermore, a unanimous definition of CSR does not exist. This has resulted in difficulties when applying strict standards or sanctions to firms that do not comply with codes (Mah, 2004). Consumers increasingly base their opinion of a business on factors like treatment of employees, community involvement and environmental issues, instead of traditional factors like product quality, value for money and financial performance (Dawkins and Lewis, 2003). In addition to this, there is a trend in business that in particular young and highly trained employees want a sense of purpose in their work (Colvin, 2001). They want to know that their work has a positive effect on the world. The possibility for businesses to...

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