Corporate Social Responsibility and Financial Performance

Subject: Management
Pages: 6
Words: 1383
Reading time:
5 min
Study level: College

Executive summary

Corporate social responsibility (CSR) activities are adopted by organisations to improve their public images in communities that they conduct business activities. CSR approaches have the potential understand customer needs and ways through which they could be satisfied. One of the approaches to understanding customer needs is by deciphering behavioural changes with regard to specific goods and/or services.

Thus, management teams of companies identify CSR strategies that could improve customer satisfaction levels and result in excellent performance outcomes of companies. Investments in customer behaviours have long-term effects, which could be used by business organisations to improve market share and competitive advantage. It is important for management teams of companies to adopt innovative approaches to improving relationships between firms and customers.

Two individuals will play different roles to accomplish common goals in the proposed project. The conceptual framework of the project will be based on the idea that CSR activities positively correlate with improved customer satisfaction and performance outcomes of companies. The study will assess the impact of CSR on customer attitudes and long-term goals of organisations, which are greatly determined by the perceptions that consumers adopt.

The project will aim at providing responses to three research questions, which would be important in making conclusions about the topic. The study will use both qualitative and quantitative designs. In addition, it will utilise primary and secondary methods of collecting data from study participants. It is envisaged that it will take a total of 23 weeks to complete the project.


It has taken us a long journey to complete our thesis in our university. Most of the things that we have achieved were not because of our abilities and capabilities, but because of very essential contributions that were made by special people that we would like to thank. Although we might not capture all the names of the people in writing due to space limit, we would like to register that we feel indebted by the actions of hundreds of people.

First, we would like to appreciate the efforts exhibited by our faculty members and students in our university for their continued moral and physical support. Particularly, we would like to thank our project supervisors, who offered invaluable pieces of advice with regard to the conceptualisation and implementation of the project. It is worth noting that we had little experience with academic and research writing.

However, our supervisors viewed it as a duty to ensure that we developed essential skills in academic research writing. When we made errors, they did not rebuke us, but they offered guidance about what should have been done. In fact, in the contemporary world that is characterised by the application of IT in research, they mentored us with regard to the use of the internet in research.

Second, we thank our family members and friends for supporting us throughout the project. Some of them were helpful in helping us to develop and refine research ideas. Most of them were very understanding when we could not be with them due to involvement in the project. In fact, we missed their company. In addition, they gave us the confidence in undertaking the activity.

Third, we thank all the respondents who agreed to take part in the study. In fact, it is through their participation that data were collected to be analysed and conclusions made about the population. Finally, we thank the Almighty God for giving us good health and great people who were very helpful to us.

Problem statement

The conceptual framework of CSR is based on relationships that business establishments develop and maintain with communities in which they conduct their operations. In the recent past, much research has been done with regard to CSR activities of the firm. Most firms carry out CSR activities with the aim of attracting and retaining customers.

In fact, the management and marketing department formulates strategies that could address the needs to customers by engaging in community activities that would help them to interact with consumers and learn about their requirements. Customers have many requirements that must be fulfilled by business organisations in order for customers to buy and continue buying their products. However, Gray, Owen and Maunders (2007) contend that some organisations do not align their CSR events with the needs of customers.

Thus, they do not assess the impacts of the activities on the customer loyalty and perceptions about products and services. Although Gray and colleagues (2007) identified a positive correlation between CSR and customer loyalty, it would be essential to conduct a research study to ascertain the implications of CSR on customers of a firm. Qualitative and quantitative approaches would be essential in determining the implications of a firm’s CSR activities on consumers of a company’s products.

The approaches have been shown to be important in understanding dynamics of customers’ behaviours that are caused by the extent to which a firm engages in CSR activities. It would be the intention of this project to confirm the strong correlation between CSR and customer behaviour.

Background to the problem

Business organisations aim at achieving excellent performance results, which are, in most cases, symbolised by financial gains. Various management teams in firms utilise diverse approaches to attaining their desired outcomes. Modern business enterprises have adopted the application of CSR activities to attract and attain customers. CSR concept is important in value creation, which, in turn, leads to increased revenues of a firm (Siegel & McWilliams, 2000).

There has been a consensus that CSR events that are aimed at fulfilling customer requirements result in improved value of a firm. In fact, some companies have focused on CSR and product differentiation to gain competitive in competitive markets. For example, Barclays Bank participates in a number of CSR activities to ensure that it gives the best image to its customers.

Through participating in corporate social responsibility activities, businesses show that they highly regard community events and appreciate their customers. In turn, consumers respond by purchasing more products from such companies (Siegel & McWilliams, 2000).

In order to fulfil CSR objectives and act within the frameworks that focus on improving customer needs, business establishments adopt broad strategies that are committed to helping communities in which they conduct business activities. Starcher (2010) contends that it is important for organisations to conduct detailed and customer focused studies to decipher customer trends and behaviours with regard to goods and services. Such studies could either be qualitative or quantitative and they could take a relatively long period to be completed.

Miller (2011) proposes that companies need to identify the activities that could help them to improve their image in communities. Some of the events that firms could be involved in are sponsoring health activities, responding to disasters, offering capital to entrepreneurs, establishing projects geared towards community sustainability and responding to global issues such as global warming.

In fact, organisations that respond to global issues have increased chances of establishing and maintaining excellent world brands. In the context of modern business approaches, it would be important to think about CSR activities as customer-based strategies rather than the traditional strategies that were characterised by orientation towards business processes.

It is no doubt that there is increased global business competition, which is constantly making firms adopt tested and innovative approaches to conducting businesses with the aim of increasing market share and gaining competitive advantage. CSR approaches have the potential to improve a firm’s expansion and development towards an excellent brand. Research has indicated that CSR promotes the pace at which business establishments respond to customer issues, which greatly determines the extent to which customers are satisfied with a firm’s services and goods (Siegel & McWilliams, 2000).

Management teams should always focus on how engaging in community-based activities would result in improved satisfaction levels of customers. In other words, business enterprises should adopt the best approaches that could be used to benefit communities and meet customer needs. This implies that the strategies should be based on customers. In the modern world, customers are quite sensitive to actions of companies.

Thus, it would be expected that firms that act unethically would lose a significant number of customers. In fact, unethical practices negatively impacts a firm’s public image and reduce its financial results. However, effective CSR paradigms greatly improve the perceptions of customers with regard to a firm’s products.


Gray, R. H., Owen, D. L. & Maunders, K. T. (2007). Corporate social reporting: Accounting and accountability. New Jersey, NJ: Prentice Hall.

Miller, L. (2011). The high-performance organisation. European Business Forum, 6(2), 73-79.

Siegel, D. & McWilliams, A. (2000). Corporate social responsibility and financial performance: Correlation or misspecifications? Strategic Management Journal, 21(5), 603-609.

Starcher, G. (2010). Towards a new paradigm of management. European Business Forum, 32(6), 23-46.