REVISITING THE CORPORATE SOCIAL RESPONSIBILITY (CSR) AND PERFORMANCE RELATIONSHIP THROUGH A DYNAMIC RESOURCE MANAGEMENT VIEW

Abstract

Purpose- This paper aims to analyze the relationship between firms’ corporate social responsibility (CSR) practices and economic performance. Additionally, this research explores the role of strategic flexibility (SF) which is the ability of a firm to adapt to changes in the external environment and make necessary organizational modifications quickly to direct its resources for a CSR activity, in this relationship. Methodology- The paper empirically investigates the CSR practices together with SF and their effects on firm performance with a study of 179 firms in Turkey using moderated multiple regression methods.

Findings- The results show that CSR practices are significantly associated with firm performance, indicating that a higher amount of CSR may improve financial performance.

Conclusion- Finally it was found SF plays a positive moderating role on the relationships between the CSR practices and firm performance. It is concluded that firms with higher skills of SF may obtain better economic performance from their CSR activities.

Keywords

• Corporate social responsibility,strategic flexibility,firm performance,multiple regression,Turkish firms

References

1. Arya, B., Zhang, G. (2009). Institutional reforms and investor reactions to CSR announcements: evidence from an emerging economy. Journal of Management Studies, vol. 46, no. 7, p. 1089–1112.
2. Brozovic, D. (2016). Strategic flexibility: a review of the literature. International Journal of Management Reviews, DOI: 10.1111/ijmr.12111.
3. Grewal, R., Tansuhaj, P. (2001). Building organizational capabilities for managing economic crisis: the role of market orientation and strategic flexibility. Journal of Marketing, vol. 65, no. 2, p. 67– 80.
4. Helfat, C. A., Peteraf, M. A. (2015). Managerial cognitive capabilities and the micro-foundations of dynamic capabilities. Strategic Management Journal, vol. 36, no. 6, p. 831–850.
5. Liedong, T. A., Ghobadian, A., Rajwani, T., O’Regan, N. (2015). Toward a view of complementarity: trust and policy influence effects of corporate social responsibility and corporate political activity. Group & Organization Management, vol. 40, no. 3, p. 405–427.
6. McWilliams, A., van Fleet, D. D., Cory, K. D. (2002). Raising rivals' costs through political strategy: an extension of resource-based theory. Journal of Management Studies, vol. 39, no. 5, p. 707– 724.
7. Mellahi, K., Frynas, J. G., Sun, P., Siegel, D. (2016). A Review of the non-market strategy literature: toward a multi-theoretical integration. Journal of Management, vol. 42, no. 1, p. 143–173.
8. Nadkarni, S., Herrmann, P. (2010). CEO personality, strategic flexibility, and firm performance: the case of the Indian business process outsourcing industry. Academy of Management Journal, vol. 53, no. 5, p. 1050–1073.

9. Oliver C., Holzinger, I. (2008). The effectiveness of strategic political management: a dynamic capabilities framework. Academy of Management Review, vol. 33, no. 2, p. 496–520.
10. Orlitzky, M., Schmidt, F. L., Rynes, S. L. (2003). Corporate social and financial performance: a meta-analysis. Organization Studies, vol. 24, no. 3, p. 403–441.
11. Rehbein, K., Schuler, D. A. (2015). Linking corporate community programs and political strategies: a resource-based view. Business & Society, vol. 54, no. 6, p. 794–821.
12. Sirmon, D. G., Hitt, M. A., Ireland, R. D., Gilbert, B. A. (2011). Resource orchestration to create competitive advantage: breadth, depth, and life cycle effects. Journal of Management, vol. 37, no. 5, p. 1390–1412.
13. Surroca, J., Tribo, J. A., Waddock, S. (2010). Corporate responsibility and financial performance: the role of intangible resources. Strategic Management Journal, vol. 31, no. 5, p. 463–490.
14. Turker, D. (2009). Measuring corporate social responsibility: a scale development study. Journal of Business Ethics, vol. 85, no. 4, p. 411–427.
15. Waddock, S. A., Graves, S. B. (1997). The corporate social performance-financial performance link. Strategic Management Journal, vol. 18, no. 4, p. 303–319.
16. Wei, Z., Yi, Y., Guo, H. (2014). Organisational learning, ambidexterity, strategic flexibility, and new product development. Journal of Product Innovation Management, vol. 31, no. 4, p. 832–847.
17. Young, S. L., Makhija, M. V. (2014). Firms’ corporate social responsibility behavior: an integration of institutional and profit maximization approaches. Journal of International Business Studies, vol. 45, no. 6, p. 670–698.
18. Zhao, X. P., Murrell, A. J. (2016). Revisiting the corporate social performance-financial performance link: a replication of Waddock and Graves. Strategic Management Journal, vol. 37, no. 11, p. 2378–2388.
19. Zhou, K. Z., Wu, F. (2010). Technological capability, strategic flexibility, and product innovation. Strategic Management Journal, vol. 31, no. 5, p. 547–561.