Importance of Corporate Social Responsibility (CSR) and Corporate Reputations (CR)
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Added on 2020-12-01
Importance of Corporate Social Responsibility (CSR) and Corporate Reputations (CR)
Added on 2020-12-01
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The importance of Corporate Social Responsibility (CSR) and Corporate Reputations (CR) is growing, as CSR is the main tool of the enterprise to increase sustainable development in developed and developing countries (Balmer and Geyser, 2003, 2006). Appropriate management of corporate reputation is especially important for firms that are having their main strengths and developing their competitive advantage and differentiation strategies based on such intangible assets as innovation, high intellectual capital and high organizational culture (Barney, 2001). The differentiation strategies are linked with resource-based view of developing strategy, providing how valuable and difficult it is to imitate such intangible assets like Corporate Reputation and Corporate Brands; therefore, these can provide for high profits and rapid growth of firms (Walker, 2010; Riera and Iborra, 2017). Corporate Reputation (CR) has become even more important nowadays due to the corporate governance scandals linked to the dangerous products and services, corruption, involvement in politics etc. The recent worldwide corporate scandals highlighted the influence of irresponsible behaviour on damage for reputation and brand and bankruptcy of the well-known enterprises claiming themselves as responsible. The Corporate Hypocrisy, due to the irresponsible corporate policies, has attracted attention of many scholars in recentyears as well (Janney and Gove, 2011; Armstrong and Kesten, 2013; Arli et al., 2017; Shim and Kim, 2017). There are several theoretical and many empirical studies that are dealing with corporate reputation and company image, brands that provide for organizational success by allowing them to differentiate themselves from other organizations while remaining fully legitimate (Deephouse and Carter, 2005). In this field of research, the most popular issue that is being addressed is linked to marketing, branding and communications. There is some important empirical proof of relationship between CR and Corporate Branding (CB) and financial performance (Roberts and Dowling, 2002). The CSR, corporate reporting requirements are as well driving the current interest in corporate reputation. Corporate image represents the public perception of the firm and is linked to the composite psychological impression of the firm’s name. It is the public perception of the company unlike identity ofthe company. However, there is no clear agreement among scientists regarding the relationship between CSR, Corporate Image (CI) and Corporate Reputation (CR) and Corporate Brands (CB) and their outcomes. In addition, there are various definitions of CR, CI and CB that are making development of theoretical frameworks even more difficult (Dowling, 2001; Crane et al., 2008; Wartik, 2012; Matera andBaena, 2012; Harvey, 2014).Several studies have tried to explain the relationship between CSR and financial performance of firm. Among the list, Mittal et al (2008) investigated the relationship between CSR and organizational profitability in terms of economic value added (EVA) and market value added (MVA). The authors found that there exists a positive relationship between CSR and company's reputation and that there is little evidence that companies with a code of ethics would generate significantly more economic value added (EVA) and market value added (MVA) than those without codes. Also Hossein, et al. (2012) examined thelink between CSR and economic performance by examining different impacts of positive and negative CSR activities on financial performance of hotel, restaurant and airline companies, theoretically based on positivity and negativity effects. Findings suggest mixed results across different industries contributing to companies‟ appropriate strategic decision-making for CSR activities by providing more precise information regarding the impacts of each directional CSR activity on financial performance. Similarly Emilson, (2012) researched into the correlation between CSR and profitability using economic
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