Strategic Management Journal · 1997 · 879 citations · 0 references
BusinessStrategic ManagementStrategyBusiness StrategyCorporate StrategyStrategic PlanningSocial PerformanceSocial Performance MeasurementStrategic Performance ManagementStrategic ResourcesCorporate Performance MeasurementCorporate Social Performance MeasurementFinancial Performance ImpactFinancial Performance LinkagesFirm Financial PerformanceSocial Performance Assessment
Strategic managers must allocate scarce resources amid increasing pressures, many of which stem from social issues rather than traditional strategic concerns. The study investigates the empirical link between corporate social performance and financial performance using an enhanced data source. The authors conduct a rigorous empirical analysis of CSP and financial performance using a greatly improved data source. Corporate social performance is positively associated with both prior and future financial performance, indicating that slack resources and good management are linked to higher CSP.
Strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them. Recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management, rather than traditional arenas of strategic management. Using a greatly improved source of data on corporate social performance, this paper reports the results of a rigorous study of the empirical linkages between financial and social performance. Corporate social performance (CSP) is found to be positively associated with prior financial performance, supporting the theory that slack resource availability and CSP are positively related. CSP is also found to be positively associated with future financial performance, supporting the theory that good management and CSP are positively related.© 1997 by John Wiley & Sons, Ltd