Corporate social responsibility and firm’s performance: empirical evidence

Abstract

Purpose The concept of corporate social responsibility (CSR) has emerged over the past 30 years to occupy a significant role in certain aspects of the organizational theory. The purpose of this paper is to examine the impact of CSR and firm’s operational competitive performance in terms of cost, quality, flexibility and delivery, as well as the overall performance, from a developing country’s environment. Design/methodology/approach Structural equation modeling was used to study the relationship between CSR, competitive operational capabilities and the overall organizational performance using a survey of informants. Findings Using data from firms in Ghana, the work demonstrates that CSR initiative by firms will have a positive relationship with firm’s operational competitive performance in terms of cost, quality, flexibility and delivery performance, as well as overall performance. Furthermore, the study demonstrates that competitive operational capabilities in terms of cost and flexibility will lead to firms’ overall performance from the Ghanaian business environment, whereas delivery and quality seems to have no positive effect on overall performance. Research limitations/implications The results indicate the relevance and the implications of CSR initiatives on firms’ performance in a developing country such as Ghana. Specifically, the results indicate that when organizations invest in CSR initiatives, they are likely to achieve cost reductions, improved quality, flexibility, improved delivery and overall performance. Practical implications The research shows how CSR initiatives can enhance firm’s operational competitive performance and overall performance. Originality/value The work illustrates and provides some insights and builds on the literature in the area of CSR in a developing country’s environment.