THE RELATIONSHIP BETWEEN SOCIAL PERFORMANCE AND CORPORATE FINANCIAL PERFORMANCE
Keywords:
Social performance, Return on assets, Returns on equity, Elimination samplingAbstract
This study investigates the relationship between social performance and corporate financial performance based on the information of companies listed in Tehran Stock Exchange - Iran. Today, economic entity has to identify the needs of their surrounding environment and community and in general interested parties to continue their survival and link with executive operation of the manufacturing of their products and by explaining the necessities of community provide the best services and achieve their organizational goals by selling more products. Overall, the process to identify community needs and interested parties and surrounding environment and provide services to them placed in social performance framework which is considered as the important issues to achieve success for organizations in today's competitive world. Therefore, we can say that the companies which do better their social functions financially might be in a desirable place than other competitor. In this study have been selected 90 companies of Tehran stock exchange based on elimination sampling and in order to investigate whether good social performance also leads to better financial performance. Financial variables are ROA and ROE and social variables contain five dimensions of Mark vinola model which obtain from tracking in financial statements and notes and based on score between -2 and +2. Finally, we conclude that there is no significant relationship between the social performance and corporate financial performance.
Downloads
References
Achrol, R. S. (1997). Changes in the theory of interorganizational relations in marketing: Toward a network paradigm. Journal of the academy of marketing science, 25(1), 56- 71.
Abernethy, M. A., and Brownell, P. (1999). The role of budgets in organizations facing strategic change: an exploratory study. Accounting, organizations and society, 24(3), 189-204.
Berman, S. L., Wicks, A. C., Kotha, S., and Jones, T. M. (1999). Does stakeholder orientation matter? The relationship between stakeholder management models and firm financial performance. Academy of management journal, 42(5), 488-506.
Carroll, A. B. (1999). Corporate social responsibility evolution of a definitional construct. Business and society, 38(3), 268-295.
Chaffee, E. E. (1985). Three models of strategy. Academy of management review, 10(1), 89- 98.
Child, J. (1972). Organizational structure, environment and performance: The role of strategic choice. Sociology, 6(1), 1-22.
Clarkson, M. E. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. Academy of management review, 20(1), 92-117.
Collins, F., Holzmann, O., and MENDOZA, R. (1997). Strategy, budgeting, and crisis in Latin America. Accounting, organizations and society, 22(7), 669-689.
Daft, R. L., and Lengel, R. H. (1986). Organizational information requirements, media richness and structural design. Management science, 32(5), 554-571.
Dittman, D. A., Hesford, J. W., and Potter, G. (2008). Managerial accounting in the hospitality industry. Handbooks of management accounting research, 3, 1353-1369.
Donaldson, T., and Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of management review, 20(1), 65-91.
Frow, N., Marginson, D., and Ogden, S. (2010). “Continuous” budgeting: Reconciling budget flexibility with budgetary control. Accounting, organizations and society, 35(4), 444- 461.
Ghemawat, P. (2002). Competition and business strategy in historical perspective. Business history review, 76(01), 37-74.
Greenhaus, J. H., Parasuraman, S., and Wormley, W. M. (1990). Effects of race on organizational experiences, job performance evaluations, and career outcomes. Academy of management Journal, 33(1), 64-86.
Griffin, J. J., and Mahon, J. F. (1997). The corporate social performance and corporate financial performance debate twenty-five years of incomparable research. Business and society, 36(1), 5-31.
Harrison, J. S., and Freeman, R. E. (1999). Stakeholders, social responsibility, and performance: Empirical evidence and theoretical perspectives. Academy of management journal, 42(5), 479-485.
Holder-Webb, L., Cohen, J. R., Nath, L., and Wood, D. (2009). The supply of corporate social responsibility disclosures among US firms. Journal of business ethics, 84(4), 497-527.
Hoskisson, R. E., and Hitt, M. A. (1990). Antecedents and performance outcomes of diversification: A review and critique of theoretical perspectives. Journal of management, 16(2), 461-509.
Husted, B. W. (2000). A contingency theory of corporate social performance. Business and society, 39(1), 24-48.
Ibua, M. P. (2014). The influence of institutional factors and job related attitudes on the relationship between employee empowerment and performance of public universities in Kenya (Doctoral dissertation, University of Nairobi).
Jardine, C., Hrudey, S., Shortreed, J., Craig, L., Krewski, D., Furgal, C., and McColl, S. (2003). Risk management frameworks for human health and environmental risks. Journal of toxicology and environmental health part B: Critical reviews, 6(6), 569-718.
Jaworski, B. J., and Kohli, A. K. (1993). Market orientation: antecedents and consequences. The Journal of marketing, 53-70.
Lenz, R. T. (1981). ‘Determinants’ of organizational performance: An interdisciplinary review. Strategic management journal, 2(2), 131-154.
Letiche, J. M. (2010). Transforming sub-Saharan Africa. Journal of policy modeling, 32(2), 163-175. Maon, F., Lindgreen, A., and Swaen, V. (2009). Designing and implementing corporate social responsibility: An integrative framework grounded in theory and practice. Journal of business ethics, 87(1), 71-89.
McGuire, J. B., Sundgren, A., and Schneeweis, T. (1988). Corporate social responsibility and firm financial performance. Academy of management journal, 31(4), 854-872.
McWilliams, A., and Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. Academy of management review, 26(1), 117-127.
Menguc, B., and Auh, S. (2006). Creating a firm-level dynamic capability through capitalizing on market orientation and innovativeness. Journal of the academy of marketing science, 34(1), 63-73.
Mintzberg, H., and Waters, J. A. (1985). Of strategies, deliberate and emergent. Strategic management journal, 6(3), 257-272.
Murray, A., Sinclair, D., Power, D., and Gray, R. (2006). Do financial markets care about social and environmental disclosure? Further evidence and exploration from the UK. Accounting, auditing and accountability journal, 19(2), 228-255.
Orlitzky, M., Schmidt, F. L., and Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization studies, 24(3), 403-441.
Pateman, H. A. (2015). The role of strategic intent in collaboration: knowledge creation and transfer in the Australian logistics industry: part A (Doctoral dissertation, University of Tasmania).
Pearce, J. L., Stevenson, W. B., and Perry, J. L. (1985). Managerial compensation based on organizational performance: A time series analysis of the effects of merit pay. Academy of management journal, 28(2), 261-278.
Porter, M. E., and Kramer, M. R. (2002). The competitive advantage of corporate philanthropy. Harvard business review, 80(12), 56-68.
Putra, Z. A. (2016). Use of Process Simulation for Plant Debottlenecking. Indonesian journal of science and technology, 1(1), 74-81.
Roman, R. M., Hayibor, S., and Agle, B. R. (1999). The relationship between social and financial performance repainting a portrait. Business and society, 38(1), 109-125.
Shin, M. (2004). A framework for evaluating economics of knowledge management systems. Information and management, 42(1), 179-196.
Simons, R. (1991). Strategic orientation and top management attention to control systems. Strategic management journal, 12(1), 49-62.
Sovacool, B. K. (2009). Rejecting renewables: The socio-technical impediments to renewable electricity in the United States. Energy policy, 37(11), 4500-4513.
Szulanski, G. (1996). Exploring internal stickiness: Impediments to the transfer of best practice within the firm. Strategic management journal, 17(S2), 27-43.
Teasdale, J. D. (1983). Negative thinking in depression: Cause, effect, or reciprocal relationship?. Advances in behaviour research and therapy, 5(1), 3-25.
Verschoor, C. C. (1998). A study of the link between a corporation's financial performance and its commitment to ethics. Journal of business ethics, 17(13), 1509-1516.
Von Zedtwitz, M., and Gassmann, O. (2002). Market versus technology drive in RandD internationalization: four different patterns of managing research and development. Research policy, 31(4), 569-588.
Wenger, E. (2000). Communities of practice and social learning systems. Organization, 7(2), 225-246.
Downloads
Published
Issue
Section
License
Copyright (c) 2016 Universitas Pendidikan Indonesia
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
