Investigating the relationship between social responsibility and the company's financial and non-financial performance (a case study of industrial companies in Golestan province)

Number of pages: 152 File Format: word File Code: 30316
Year: 2014 University Degree: Master's degree Category: Management
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  • Summary of Investigating the relationship between social responsibility and the company's financial and non-financial performance (a case study of industrial companies in Golestan province)

    Dissertation for M.A. degree

    Tension: Finance

    Abstract

    The purpose of this research is to investigate the relationship between social responsibility and financial and non-financial performance of industrial companies in Golestan province. Corporate social responsibility was measured through a questionnaire that contains 43 questions in the field of social responsibility of employees, customers, investors, society, environment and suppliers. The information of 18 industrial companies was used in 2013. Hierarchical regression method has been used for data analysis. The results of the research show that there is a significant relationship between the social responsibility of the company towards the 6 shareholders and the financial and non-financial performance of the companies. This research will help managers to develop effective corporate social responsibility policies that are necessary to achieve better financial performance in the long term. It also provides an insight for companies on the role of social responsibility in obtaining future benefits.           Keywords: social responsibility of employees, customers, investors, society, environment and suppliers, financial and non-financial performance

    1 Introduction

    Nowadays, many experts believe that due to reasons such as privatization and transfer of economic power from governments to organizations and as a result, the shrinking of governments, governments do not have the necessary resources and power to solve social and environmental problems, and organizations should help governments in this field. Although in recent years, globally, significant progress has been made in the field of corporate social responsibility and managers and organizations pay a lot of attention to this concept, but Iranian managers and organizations are somewhat alien to this concept. Perhaps one of the reasons for this lack of progress in Iran is the state economy, but it can be said that the type of attitude and vision of senior managers of organizations has not been without influence on this category. Some experts believe that social problems should be solved by governments. This group believes that organizational resources are not enough to solve social problems, and organizational resources should not be wasted in order to solve society's problems. Another group of experts believe that although governments are the main responsible for solving society's problems, the participation of organizations in this field opens the way. This group of experts believe that, since today, economic power has been transferred from governments to organizations, the participation of organizations in solving social problems is necessary and necessary. (Tsotsura [2], 2004, 4).

    On the other hand, adopting the principles of social responsibility is costly for organizations. These costs may include: purchasing new equipment that causes less damage to the environment; Changing the management structure or creating more severe quality controls. The benefits of adopting the principles of social responsibility for organizations include: enhancing the brand and increasing credibility [3]; the possibility of attracting more capital resources due to high commercial credit; reducing risks caused by accidents and bitter events; Improving the conditions of the working environment and, as a result, improving productivity and increasing the ability to attract and retain employees, which leads to a reduction in displacement, absenteeism and their training costs. (Ibid., 5-7). Most experts believe that the cost of social responsibility is short-term and its benefits are often long-term. Social responsibility is actually a type of investment for the future in the hope of gaining a sustainable and long-term competitive advantage. Senior managers who have a short-term vision. Short-term costs do not eliminate social responsibility. 1-2 Statement of the problem Today, the role of business units in society has undergone many changes. In such a way that business units are expected not only to think about increasing their profits but also to be responsive to the society, and to be useful for the society they are interacting with. Business unit cannot escape from society and society cannot exist without business unit, so there is a two-way relationship between business units and society. Corporate social responsibility towards the community is beneficial both for the business unit itself and for the community, and a better understanding of its potential benefits can lead to high returns on investment for companies. (Sandhu, Kapoor, 2010).Among these benefits, we can mention the increase in sales and customer loyalty. A number of studies point to a growing and large market for products and services created through companies with high social responsibility (Sandhu, Kapur, 2010). Corporate social responsibility also has other benefits, such as increasing the ability to hire new employees and keep experienced employees and the support of the government. By progressing in the direction of social responsibility, companies realize that they can more easily recruit new employees. employ and retain experienced employees for a sufficient period of time who are necessary for the success of the business unit (Terban, Gerning, 1997). Corporate social responsibility has many stakeholders, and these stakeholders are considered shareholders for some companies. The concept of stakeholders is actually the same reconfiguration from the perspective of stakeholders that evaluates the actions of stakeholders according to the new direction. In fact, corporate social responsibility is used to evaluate the performance of stakeholder groups, these groups include (employees, customers, investors, society, natural environment, and suppliers) (Wooddock, 1994). The purpose of this study is to investigate the relationship between social responsibility and the performance of industrial companies in Golestan province. In this research, the company's performance means the financial and non-financial performance of the company, which is not the same as increasing the credibility and reputation and increasing the motivation of the company's employees (Schweiger [4], 2004). Therefore, the main issue of the current research is whether social responsibility has a meaningful relationship with the influence of the company's financial and non-financial performance? and neutral (absence of relationship) between social responsibility and financial performance. There are several different views on the relationship between corporate social responsibility and financial performance. The first view is that there is a relationship between the quantitative costs of companies, such as interest hotels to bondholders, and their qualitative costs, such as production quality or security costs. Companies' efforts to bear lower quality costs through social activities lead to slightly higher costs. Also, the "social effect hypothesis" is presented as the basis of the relationship between social performance and financial performance of the company. In fact, this hypothesis suggests that meeting the total needs of non-owner stakeholders will have a positive effect on financial performance. The second point of view is that financially successful companies use less resources in creating their high financial performance, so they can devote most of their resources to social performance. The third point of view also states that companies that accept more social responsibility are less exposed to the risk of negative events because there is less chance that they will pay heavy fines for high pollution (environment), or there is a small chance that there are costly lawsuits against them, or they rarely do negative social activities that may be destructive to their credit, which ultimately have a positive effect on the financial performance of companies. Therefore, the main reason of the current research considering that so far this issue that the relationship Measuring social responsibility with financial and non-financial performance in companies has not been done. It was seen that this need to be investigated. 1-4 research objectives Main objective 1: To investigate the relationship between corporate social responsibility and financial performance of the company Sub-objectives: To investigate the relationship between corporate social responsibility in relation to employees and financial performance.

  • Contents & References of Investigating the relationship between social responsibility and the company's financial and non-financial performance (a case study of industrial companies in Golestan province)

    List:

    Chapter 1: Research overview 1

    Introduction. 2

    Statement of the problem. 3

    The necessity and importance of doing research. 5

    Research objectives. 6

    Research questions. 7

    Research hypotheses: 8

    Theoretical and operational definitions of variables. 9

    Chapter two: literature review and background of the subject. 11

    Theoretical foundations of social responsibility. 13

    2-1-1- Introduction. 12

    2-1-2 Historical course of social responsibility of the organization 13

    2-1-3 Definition of social responsibility 16

    2-1-4- Meaning and concept of social responsibility 25

    2-1-5 Social responsibility 27

    2-1-6 types of social responsibility 30

    2-1-7 dimensions of corporate social responsibility 32

    2-1-8 perspectives of social responsibility 34

    2-1-9 models of social responsibility of organizations 36

    2-1-10 the framework for determining the organization's social responsibility strategies 38

    2-1-11 individual social responsibility to achieve social responsibility Group 39

    2-1-12 The role of human resources in social responsibility. . 41.

    2-1-13 Effects of paying attention to the social responsibility of the organization. 43 2-2-1 Introduction 49 2-2-2 Definition and concept of performance and performance evaluation 50 2-2-3 Performance evaluation models 51 2-2-4 Accounting models of performance evaluation 51 2-2-5 Economic models of performance evaluation 53 2-2-6 The necessity and importance of Alamkord marketing 56. 2-2-7 Social responsibility and financial performance 58 2-2-8 Behavioral effects of using performance evaluation criteria 60 2-2-9 Non-financial performance evaluation criteria and the desirability of the process 62 2-2-10 Corporate social responsibility and Asian countries 62

    2-2-11 The company's social responsibility from the shareholders' point of view.63

    2-2-12 Measurement of the company's social responsibility.64

    2-2-13 The company's financial and non-financial performance.65

    2-2-14 The company's social responsibility and financial and non-financial performance.67

    2-2-15 Social responsibility towards customers and the company's performance.70

    2-2-16 Social responsibility of the company towards investors and company performance. 71

    2-2-17 Social responsibility towards the environment and company performance. 72

    2-2-18 Social responsibility towards suppliers and company performance. 73

    2-3 Research background 74

    2-3-1 History of research conducted inside the country 74

    2-3-2 History of research conducted abroad. 79

    2-4 theoretical framework of research 82

    Chapter three: research methodology. 84. 3-1 Introduction 85 3-2 Research methodology 85 3-3 Statistical population, sample size and sampling method 86 3-4 Collection tool 87 3-5 Data collection method 87 3-6 Validity and reliability of research 89 3-7 Analysis method Glorification of information 93

    Chapter 4 95

    4-1 Introduction 96

    4-2 Description of research findings 96

    4-3 Test of normality of research data 98

    4-4 Description of the main research variables and correlation test 99

    4-4 Hierarchical regression test 104

    Chapter Five 109 5-1 Introduction 110 5-2 Analysis and suggestions based on it 111 5-3 Research limitations 115 5-4 Recommendations for the future 116 Resources 117 Appendix 135

    List of tables

    Table 2-1 Theorists and the impact of organization size on the organization structure. 33

    Table 2-2 Theorists and the impact of organization size 33

    Table 2-3 The impact of organization size on the ratio of administrative staff 34

    Table 2-4 Introduction of the strategic alignment models of information technology with the business of the organization. 66

    Table 3-1 Questionnaires of the organization size questionnaire. 94

    Table 3-2 Distribution of questions of the exploration strategy questionnaire. 95

    Table 3-3 Distribution of questions of the organization performance questionnaire. Cronbach's alpha. 98

    Table 4-1 frequency distribution according to gender. 102

    Table 4-2 frequency distribution according to age. 103

    Table 4-3 frequency distribution according to education. 104

    Table 4-4 frequency distribution according to work experience. 105

    Table 4-5 descriptive statistics of research variables. 106

    Table 4-6 of the K-S test. 107

    Table 7-4 of the rate107

    Table 4-7 Correlation rate between information technology and organizational performance. 108

    Table 4-8 Correlation rate between exploration strategy and organizational performance. 109

    Table 4-9 Correlation rate between information technology architecture and organizational performance. 110

    Table 4-10 Variance analysis. 111

    Table 4-11 Correlation coefficient and coefficient of determination. 112. Table 4-12 Durbin-Watson test. 113. Table 4-13 multivariate regression analysis. 114. Table 4-14 summary of the research hypothesis test. 115. 115.

     

     

     

     

     

     

     

     

     

     

     

     

     

    List of issues

    Figure 2-1 The place of IT architecture in IT strategy 40. Figure 2-2 Information technology architecture at three levels. 41. Figure 2-3. Advantages of information technology architecture against its challenges. 42. Figure 2.4 four architecture strategies and focus on different benefits. 48. Performance

    Figure 2-7 of Michael Porter's general strategies. 60

    Index 2-1 Features of the most important information technology design methodologies. 49

    Index 2-2 Henderson and van Katterman's strategic alignment model. 53

    Index 2-3 alignment creation model. 55

    Index 2-4 Next step In aligning IT business. 56

    Conceptual model of research. 86

    Chart list

    Chart 2-1 Individual performance system. 76

    Chart 4-1 frequency distribution by gender 102. Chart 4-2 Frequency distribution according to age. 103 Chart 4-3 Frequency distribution according to education. 104 Chart 4-4 Frequency distribution according to work history. Management and social responsibilities of the organization, Tehran, Government Management Training Center.

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Investigating the relationship between social responsibility and the company's financial and non-financial performance (a case study of industrial companies in Golestan province)