Corporate Social Responsibility Programs and Initiatives of Global Firms: A Qualitative Assessment and Analysis of Financial Performance and Productivity

Corporate Social Responsibility (CSR) is a significant and evaluative business concept, which is expected to be practiced internationally for decades in order to achieve and sustain competitive advantage. The concept is used to assess the presence of multinational firms for social and community interest and support. Therefore, the focus of this paper is to determine whether there is a correlation or link between Corporate Social Responsibility, Financial Performance (FP), and Productivity.Recent research by (Arshad, Anees, & Ullah 2015; Lawrence, Weber, & Post, 2017) indicates that stakeholders around the world measureand support multinational firms on whether they engage in corporate social responsibility as it is a single most critical factor contributing to competitive advantage and increased financial performance. This study then explores the currenttrend in corporate social responsibility and attempts to determine the extent to which firms are participating in corporate social responsibility programs. In other words, the basic thrust of this research is an assessment of whether corporate social responsibility contributes to improved financial performance and overall productivity as demanded by global stakeholders. Employing content analysis of recent publications, the strategic role of the concept of corporate social responsibility of multinational firms was analyzed, specifically its link to financial success. The Stakeholder Perspective Theory of corporate social responsibility was applied inconductingcost-benefit analysis of firms’ engagement in corporate social responsibility. Results from various studies indicate a lack of consensus among internal and external stakeholders on the financial growth of firms participating in social responsibility initiatives.Researchers as well as practitioners (Peloza, 2011; Cheng, Loannou, & Serafeim, 2014; Magbool & Zameer, 2018) support corporate social responsibility concept as a responsible business practice; but,they suggested that the concept does not necessarily translate into financial performance gains and success in corporate productivity. Based on qualitative and quantitative analytical frameworks over a period of ten years, this paper recommends increased corporate social responsibility for enhanced corporate image and for successful global competitiveness. Introduction and Background Among the current issues facing multinational corporations in the twenty-first century business environment is the sustainability of Corporate Social Responsibility (CSR), which has become increasingly imperative because of the fact that relevant stakeholders, including market and nonmarket, are now expecting firms to conduct their global operations in a socially responsible manner. The attainment of this goal is significant in order for corporations to achieve and sustain a competitive advantage in the global marketplace. As a result, a number of global firms have responded by engaging in socialresponsibility programs and initiatives, andby employing corporate social responsibilityframework as part of their operational strategy. 1 Howard University Strayer University 2 Strategic Management Quarterly, Vol. 6(3-4), December 2018 Scholars, researchers, and independent consultants have determined that market stakeholders, include creditors, customers, employees, suppliers, managers, among others; while nonmarket stakeholders, include the community, various levels of government, competitors, the general public, etc. (Barney, 2011; Arshad, Anees, & Ullah, 2015; Lawrence & Weber, 2017). This dichotomy of stakeholders allows for the establishment of appropriate programs for different interest groups who support global firms. Accordingly, when firms implement corporate social responsibility strategies and initiatives, they in turn cultivate positive and lasting relationships with both market and nonmarket stakeholders, resulting inincreasingcorporate image, expandedbrand equity, and enhancedglobal reputation and competitiveness. While creating many business opportunities to their advantage through social responsibility programs, which gradually leads to increasing their financial performance, productivity, and market-share, multinational firms attempt to encourage and establish social responsibility initiatives in countries where they have business operations and subsidiaries (Husted & Allen, 2007; Loannou & Serafein, 2014; Kadluck, 2015). Over the past decade, some corporate social responsibility researchers (Lawrence, Weber, & Post, 2017; Magbool & Zameer, 2018) have sought to determine whether or not the establishment of corporate social responsibility initiatives is directly or indirectly associated with increased sales margin as well as profitability in the final analysis of firms’ financial success. Based on Friedman (1970) analysis over the past years, firms should not necessary embark on corporate social responsibility programs, because such initiatives do not increase or enhance their profit-margin and may not sustain long-term competitive advantage. In their empiricalanalysis, Olowokudejo & Aduloju(2011) and Babalola (2012) contend that when firms undertake corporate social responsibility as a part of their organizational strategy, there should besufficient evidence that such firms outperformed their competitors, because the firms could attract more resources as the concept of CSR allows them to employand retain the best workforce in their industry. A recent example wasGoogle Corporation, which has done exceedingly well as a result of corporate social responsibility program that was established. Specifically, Google corporate social responsibility initiatives werecategories into three distinct units that include governance, citizenship, and workplace. For governance, the company was evaluated and rated based ontransparency, ethical attitude toward its customers, employees, as well as its transparency in conducting business relationships. While citizenship was based on environmental responsibility and support tosocial causes and interests, hard work was predicated on employees being treated fairly, respectfully, and with dignity at all times.This corporate social responsibility strategy created a positive relationship between Google and its market and nonmarket shareholders over time, demonstrating a sustainable and enduringrelationship between the firm’s corporate social responsibility and its financial performance. In addition, some scholars (Arshad, Anees & Ullah, 2015; Shin, Hur, & Kang, 2016) substantiated their support for stakeholder theory argument, contending that there was nothing wrong with businesses making profit, but the fact remained that these firms should interact constantly with their primary stakeholders, such as suppliers, employees, customers, investors, among others. In other words, the fundamental objective of corporate social responsibility is to establish a positive effecton the environment, community, and society in general.Whilethere were various studies (Jones, 1995; Allouche & Laroche, 2005; Hartley, 2011)focused on the relationships between corporate social responsibility and firms’ financial performance that indicate moderate relationships, positive relationships, negative relationships, neutral relationships. These studies were in agreement that firms’ should implement corporate social responsibility initiatives in order to be successful and to remain competitive. Evidently, there is a correlation between firms’ corporate social responsibility and their financial performance over a period of time. Therefore, this study specifically examined recent scholarly literature on corporate social responsibility and firms’ financial performance. Bbased on the implementation of community-oriented programs, the study reviewed the relationship between corporate social responsibilityand financial performance in global business environment. Specific issues confronting firms when implementing corporate social responsibility were also critically explored and analyzed in the context of competitiveness. Importance of the Study In the past few years, many global and domestic organizations faced a litany of complaints and issues bordering on unethical or dishonest business practices, abuse of trust, and fraud. Recent research(Corporate Scandal Sheet, 2012; Ronald McDonald House Charities, 2012) indicatesthat in the years 2001 and 2002, consumer confidence and level of trust in business undertakings plummeted as stakeholders could no longer trust business leaders in the United States and around the world. One of the notorious scandals of this decade was about Enron that occurred in late 2001, which resulted in a regrettable loss of many jobs, individual life savings, homes, and livelihood. Ephraim Okoro & Samuel Garwon 3 Both internal and external stakeholders of firms reacted negatively to the increasing distrust among businesses in the conduct of their operations. Post-Enron studies noted that the concept of corporate social responsibility is not an approach for short-term profitability and efficiency; rather, a better estimate of long-term benefits of a firm. However, for strategic approaches concerning corporate social responsibility and financial performance relationship, there was no definitive conclusion as to whether there was a positive relationship, a negative relationship, or no relationship at all.For instance, Magbool & Zameer (2018),inspite of recent positive findings on the relationship between corporate social responsibility and financial performance, researchers and practitioners (Goll & Rasheed, 2004; Raggio, 2010; Porter & Kramer, 2011) determinedthat a constant investigation needed to be conducted to see whether or not the relationship is positive or negative. Furthermore, more recent studies (Porter, & Rivkin, 2012; Harrison & Wicks, 2013; Lawrence, Weber, & Post, 2017) noted conflicting conclusions about positive outcome between corporate soc