The relationship between CSR and CR
Corporate Social Responsibility (CSR) and Corporate Reputation (CSR) are closely related, as CSR in its broader context (good corporate governance, social and environmental risk management) satisfies stakeholder expectations and contributes to the Generation of CR. Obtaining a good reputation generally responds to good communication work, but obviously must underpin a good management of corporate responsibility. There is no point in an excellent communication campaign if, for example, there is a high level of labor conflict that denies the message that the company is communicating (Lenssen, 2007).
Corporate reputation is achieved through the coherence between the values ??that the company communicates that it has adopted, and its behavior in the conduct of its activity and in front of the interest groups. Integral behavior is based on compliance with the law, but it has to go further. Every organization must internalize and apply responsible behavior in its processes, which is the broader idea of ??CSR. The real commitment of the company with its stakeholders implies the implementation of a good corporate governance system and responsible behavior with stakeholders and the environment. From this responsible behavior, the company can carry out a communication plan that helps to build its corporate reputation. If the commitment is not real and the behavior is not consistent, the corporate reputation will have developed exclusively on the company’s communication and will be in constant danger, so that any incoherence that is discovered will quickly destroy the reputation built on such fragile foundations .
According to(Lenssen, 2007),in an analysis of the evolution of the concept of CSR, from the 1970s to the present day and from the inside out, explained that practices that had been adopted initially from the 1960s to the end of this decade Were based on their relationship with other companies and with the community through philanthropy programs and volunteer actions. In the mid-1980s, corporate structures were transformed to make a CSR policy closer to stakeholders: customer service departments, investor relations, public relations, among others. From the end of the eighties, companies saw the need to incorporate codes of ethical conduct into their activities. It was also important to inform publicly about the social work of the company, since this information served to establish a good communicative basis between the company and its stakeholders (Bakker, Neergaard, & Crowther, 2016). In the 1990s, complaints from environmentalists and the growing importance of environmental problems led to the taking of such measures (environmental action) and to disseminating environmental reports and, subsequently, social action reports on an individual basis. At present, the environmental report and the social report, in an individualized way, are often seen as tools for dialogue between the company and its stakeholders, which can make the company, feel pressured to make changes because it publicly exposes its acts And, therefore, can be examined and observed as to what does not “do well”.
Concepts and theories of CSR and CR
The main obligation of a company is to generate wealth. However, if this objective is achieved at any price, the behavior of the company becomes unacceptable to the stakeholders, generating a loss of reputation that will seriously compromise the sustainability of the company (Bakker, Neergaard, & Crowther, 2016). In an environment of great public exposure and increasing access to information, society demands from companies responsible behavior. Therefore, corporate reputation management not only with the objective of profitability but also as a measure of protection against crisis situations, has become essential for the survival of companies. CSR is a model of management, the way of doing things that the company has internalized, on which the corporate reputation is built, and which favors its consolidation.
After the first ten years of the twenty-first century, it seems widely accepted that value creation must occur not only for the shareholder, but also for the rest of the participants and social agents, depending on the role each one plays.
This approach is known in the literature as the approach of the stakeholders, beyond the classical financial approach of the shareholders. Milton Friedman (1962) embodies the shareholder approach that is summarized in two principles: 1) the only public to which the company is accountable is its shareholders; 2) The only objective that the company should seek is the maximization of the profit or value of the company. On the contrary, the stakeholder approach encompasses all the groups that are interested in the company that the company has to balance for its own benefit. These groups would be constituted by shareholders, employees, suppliers of both financial capital and goods and services, the state and society as a whole (Bakker, Neergaard, & Crowther, 2016). Therefore, it can be said that the company is a nexus of implicit contracts based on trust and reputation that tries to balance all the interests involved in it, both external and internal.
Once the existence of stakeholders has been recognized that can contribute to the organization’s success , companies over the last thirty years have begun to meet their demands, sometimes due to Force of legislation and others on a voluntary basis or by the explicit pressure of certain groups. All actions aimed at meeting the needs of the different stakeholders are called corporate social responsibility, hereinafter CSR .
There is now a great deal of discussion in both the corporate and academic world about the “real” contribution of CSR to the company and its financial performance. There are authors who say that the development of CSR by companies is one of the main inducers of financial performance improvement. While some studies have found a positive relationship between the impact of CSR on the firm and financial performance in others this relationship is diffuse. Therefore, it is necessary to investigate further in this field. Especially, the shortage of studies is most evident in developing countries.
Evolution of CSR from the 1970s to present
The above conclusions lead us to propose some recommendations for business practice. First, since the development of CSR by the company is related to greater financial performance, Australian companies should strive to introduce it into their business strategy and culture. Second, Australian companies must develop their own identity in CSR, based on their environment and their stakeholders, without imitating practices developed in other environments, which implies a detailed analysis of their stakeholders and their expectations, and align them with the strategy Of the company (Zu, 2009). Finally, it is recommended to have a CSR policy that is clear, visible, sustained and certified by a third party, since it can optimize the company’s development plans.
In addition, although it is a relatively young practice in many countries, it is even more relevant, if any, the commitment of these companies to CSR because the governments of these countries have not proved to be historically “social”, for that reason – even now – they are Necessary social policies adapted to each country, that allow companies to support and contribute their grain of sand to community development in a “personalized” way to each environment. Although companies with this label have maintained it for years, it does not see a significant growth of companies that work to achieve it. This may be due to the lack of “explicit” government support, which should generate sufficient institutional support or environment for companies to make a deliberate, voluntary and “induced” decision to develop their CSR policies, standards and actions.
Therefore, it is recommended that management work in two ways. The first of which would be the development of awareness campaigns and discussion forums on CSR, for all types of companies, especially for medium and small companies, since all companies can promote corporate responsibility regardless of their size. The second route of action would be the adoption of policies and recommendations that will enable companies to adopt social responsibility actions within their scope of action. As a conclusion, it can be stated from the results obtained that Australian Less the quoted ones, should mark as strategic objective to incorporate the CSR to the strategy of the company from the reality and necessity of Australia. Undoubtedly, this will bring them great economic benefits, future development and corporate image. However, this article has several limitations that the authors intend to remedy in future studies. In the first place, it is necessary to expand the sample to companies that are not publicly traded, but that have obtained the badge; Secondly, to determine the type of CSR activities being carried out by Australian companies and their real contribution to their environment; Thirdly, to identify the differences existing in Australian in the practices of CSR between companies of Australian matrix and of other nationalities (Zu, 2009). Finally, it is intended to categorize the specific CSR practices carried out by Australian companies and to compare them with those of the rest of the world.
The importance of responsible behavior in relation to CR
One of the objectives of this paper is to analyze the extent of CSR to financial performance of the company, to contribute to extend the knowledge of the impact of CSR on the companies from the financial point of view without leaving aside the rest of the stakeholders in the companies, the stakeholders.
There are six groups of factors that appear in the literature as promoters of social responsibility: 1) interorganizational factors, 2) competitive dynamics, 3) institutional investors, 4) end consumer power, 5) government regulators And 6) non-governmental organizations. The pressure of these factors has been responsible for the development of CSR that has materialized in the different indicators and actions to be analyzed next. Management of various companies have agreed that these are some of the factors that contribute to CSR.
Some research has shown that the first approaches to CSR were in terms of human resource management policies and procedures. Thus, the first social investments and indicators that were used inside the companies could be considered to be carried out in the employees of the companies themselves, through the development of training plans, professional development plans, protection at work and improvements In their quality of life. Researchers conducted a study in which they related the company’s ethical climate and human resources practices; these authors found a positive relation in an increase of the ethics in the company through the training of the employees, the adoption of codes of ethics and of good practices and the application of the standards of health and safety in the work (Zu, 2009).
In conclusion, the concept of CSR has now acquired a broader dimension and represents the commitment voluntarily acquired by the company, beyond its legal obligations, and which is oriented to the satisfaction of its stakeholders, improving the employment situation of its employees. Employees, adjusting the prices of quality products and services and monitoring ethical behavior with all social agents; In addition, it is important to consider the environment and community development. Also, the performance variables such as (ROA), return on equity (ROE), earnings per share (EPS) and profit growth show that these parameters increase after the company starts CSR programs . The first one is based on variables obtained from accounting information, which are used in this study are return on assets (ROA), return on equity (ROE), earnings per share (EPS) and profit growth, which Are the variables most used by the doctrine in this type of studies to measure financial performance that increase with increase in CSR. The results obtained show the positive effects that CSR has on the listed company, since its impact is significant, especially in the financial performance variables of market value. These results should encourage companies to continue and increase their CSR activity.
The fact that it is precisely in the variables of financial performance of market value suggests that when the badge is obtained it acts as an announcement to the market that the company is contributing to improve its environment, satisfy the expectations of its stakeholders and increase the wealth In your community (Zu, 2009). Therefore, the investors consider that this company strives to have a sustainable future and reward this activity with abnormal returns. These results also suggest that Australian companies with a distinctive reputation are trying to provide their stakeholders with value-adding actions. Australian companies must develop their own identity in the adoption of CSR because the imitation of CSR practices that are developing in other countries such as the United States or Europe may not satisfy the stakeholders of Australian companies, since the identity and interests of These vary according to nationality.
References
Bakker, F., Neergaard, P., & Crowther, P. (2016). Managing Corporate Social Responsibility in Action. Abingdon: Taylor and Francis.
Lenssen, G. (2007). Corporate responsibility and strategic management. [Bradford, England]: Emerald.
Zu, L. (2009). Corporate Social Responsibility, Corporate Restructuring and Firm’s Performance. Berlin, Heidelberg: Springer-Verlag Berlin Heidelberg.
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