Business 313 Forum 6. Corporate Performance. Business & Marketing

Corporate Performance
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Corporate Performance
In this era of the modern economy, every business entity is moving toward forming a corporation for the sake of ensuring limited liability. Gone are the days when business was owned by an individual, instead people of like mind come together with whatever reason they aim to achieve and form corporations. Among other issues that arise as a result of forming a corporation is the element of being a socially responsible company. This paper aims to give a detailed evaluation of the relationship between corporate social responsibility and performances based on arguments by Freeman and Liedtka (1991).
According to Freeman and Liedtka (1991), the idea of corporate social responsibility is a thing of the past and should be abolished. The authors went ahead to justify their opinion giving a number of reasons to validate the idea. Among other reasons they are advocating, corporate social responsibility promotes capitalism, incompetence, and also it is conservative in nature. However, this paper differs with this opinion with arguments from modern scholars on the significance of practicing corporate social responsibility which by far, outweighs its shortcomings.
First, it is important to understand the meaning of corporate social responsibility (CSR). According to Blasi et al. (2018), the idea of CSR is seen as a positive association between the company and its environs. An environment not only refers to the vicinity of the company but also the employers, stakeholders and the communities surrounding the company. In simple terms, CSR can be defined as “the responsibility of enterprises for their impact on society” (Hansen & Seierstad 2017, p.5). Ethics in any business strategy should be put into consideration because some of the investors emphasize on this attribute during the decision-making processes (Hou, 2019). Despite the vast majority of scholars supporting the fact that corporate social relations often have a negative impact on economic growth, there exists a significant benefit of the positive relation of a firm with their respective major players.
Corporate social responsibility varies depending on the business sector of the firm. This is due to its impact on the products being sold, customers, the size of the firm and even the structural organization associate with the company. As observed by Blasi et al. (2018), the oil and gas industry pay more attention to CSR as a countermeasure to improve on their financial gain as compared to other firms such as those in the technology industry. This is due to their adverse effects on the environment as a result of pollution. This scenario among other examined points out clearly that the link between CSR and the financial performances can be different depending on the sector in which the corporation belongs.
Other than the sector specificity, other driving forces encourage corporates firms to embrace policies that foster social responsibilities. There exist two common models of business transactions as observed by Luffarelli et al. (2019); the business to business (B2B) model and business to consumer (B2C) models. Their study implies the observances of CSR have a negative impact on B2...