Corporate Social Responsibility on Corporate Tax and Investment Decisions.

Running Head: CORPORATE SOCIAL RESPONSIBILITY
CORPORATE SOCIAL RESPONSIBILITY
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CORPORATE SOCIAL RESPONSIBILITY1
Corporate social responsibility is referred as a management concept that compels the
business organisations to encompass some important measures towards society and the
environment. It is important to note that in the modern business situation, it becomes important
for the companies to take enough initiatives for developing the society and environment
positively (Lins, Servaes, and Tamayo 2017). As per the website of United Nations, it can be
stated that CSR practice is a strategic approach for the business organisations to achieve a
balance between economic, environmental and social imperatives (Unido.org 2020). The triple
bottom line approach plays the most crucial role in CSR activities. Therefore, this essay also tries
to emphasis on the role of CSR activities in business and most importantly its influence over
corporate tax and investment decisions.
According to Wang et al. (2016) Corporate Social Responsibility is a strategy that the
business companies initiate while developing an effective organisational practice where the
purpose of the organisation is to create good relationship with the stakeholders. The major
strategies that organizations consider as a part of their CSR initiative are reflected through the
responsibilities and novel care for the society and the environment. Therefore, CSR approach has
immense significance in the current business practice. For instance, Schrempf-Stirling Palazzo
and Phillips (2016) mentioned that CSR activities help an organisation to create better brand
recognition. The purpose of CSR activities is to undertake participation in the philanthropic
causes while building a positive social value for the communities. It has been noted that the CSR
activities of an organization prepare the same for taking effective measure for developing the
local community and adhere to environmental concerns. It is linked with the interests of the
customers who are expecting that the company must take enough contribution for their
wellbeing. As a result of that a direct connection between the organisation and the local

CORPORATE SOCIAL RESPONSIBILITY2
community can be made that enhances the better brand recognition for the organisation. The
application of the CSR activities enables the organizations in improving the community. The
different charity programs and steps for safeguarding the environment are the major attributes of
the CSR activities that are undertaken by the organizations. The actual value of the CSR
activities rely on the commitment of the organizations towards safeguarding the interests of all
the stakeholders, including the community and the environmental protection needs of the same.
Therefore, the research of Liang and Renneboog (2017) reflected that the CSR practice is
identified as not only a strategy for developing the brand value and reputation but also adhering
to the community needs and mitigating the environmental concerns that are faced by the venture.
The CSR activities of the organizations focus on delivering their activities on the basis of
the Human rights requirements. The organizations formulate their HR policies and procedures in
correlation with the employment legislation along with strict adherence with the human rights
requirements with the purpose of complying with the interests of the employees and the other
stakeholders. Moreover, from the research of Jamali and Karam (2018) it can be derived that the
employment creation and value propositions to the different level stakeholders are the major
aspects that are considered by the businesses with the objective of improving the social lifestyle
conditions in the respective region of its operations. Matten and Moon (2020) opined that the
organizations are also liable of improving the communities in their region of operations through
different charity measures and educational reforms. The active involvement of the community
stakeholders in the different organizational measures would empower the mutual growth of the
organization along with the developments in the communities in which the organization operates.
It is further associated with the better financial performance of an organisation to set
competitive edge in the market. Albuquerque, Koskinen and Zhang (2019) pointed out in CSR

CORPORATE SOCIAL RESPONSIBILITY3
practices the business companies are opted for the triple bottom line approach. One of the focal
point of the triple bottom line approach is to foster a financial stability to the organisation that
can bring future security to the organisational practice. Financial performance of an organisation
is very important to foster better and strong organisational practice so that the organisation can
move forward with a positive gesture and looking forward to use the opportunities wisely
(Tencati, Misani and Castaldo 2019). Moreover, creating a solid customer loyalty is also
associated with bring healthy financial performance for the organisation. It is very essential for
the organisation to meet the satisfactions of the employees to a great extent so that it will bolster
the financial performance of the organisation perfectly.
Gond et al. (2017) pointed out that in the competitive market it is essential for the
business companies to attract and retain talented employees in order to get competitive edge. The
purpose of the CSR management is to not only set up an effective sustainable approach but it is
also resembled with the role of organisational growth. The role of CSR is to set an optimistic
communication with different stakeholders so that it will be better to convince the stakeholders
to provide immense support to the organisation. Cui, Jo and Na (2018) advocated that support
and assistance from the stakeholders is identified as an important part for the business companies
to survive in the competitive market. Moreover, Kang, Germann and Grewal (2016) asserted
with a more extensive research and focusing on the role of shareholders for the success of an
organisation. From the report, it can be stated that shareholders provide immense financial
support for continuing an effective business practice. In respect to this, the CSR activities
enhance confidence among the shareholders so that they can invest more for the benefit of the
organisation. Henceforth, it can be stated that the CSR activities has a close link with the
financial stability of an organisation (Ali, Frynas and Mahmood 2017). Further studies into the