Corporate social responsible behaviour in the financial industry

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and EconomicsThe financial crisis of 2007-2008 incited many criticisms of financial institutions, especially their policies and ethics. In response, corporate social responsibility (CSR) has increased in European and American financial industries. This increase is stimulated by both consumer demand and regulatory pressure. However, there are major differences in CSR between European and American markets, differences which indicate important market trends but are little studied. This study examines the differences in CSR behaviour between the financial industries of those two regions, and investigates what relationship, if any, exists between CSR behaviour and financial performance. This research analyses different CSR rating methodologies. An analysis of CSR rating methodologies and studies reveals a significant difference in CSR behaviour between European and American markets. The European financial industry shows a faster increase in CSR behaviour in comparison to their counterparts in the United States of America (US), enlarging the difference in CSR behaviour between the two. The results demonstrate a transformation from a positive toward a negative correlation between CSR behaviour and financial performance for the years 2009-2012, inclusive. The CSR measurement framework described by Scholtens (2008) is found to have significant correlations with other CSR rating agencies, thereby restraining its added value. Ultimately, these results affirm the importance of measuring CSR behaviour to better understand differences in the influence of CSR in the financial industry and wider differences between European and American markets

Does it pay to be socially responsible? Evidence from Spanish retail banking sector

This paper presents a theoretical and empirical analysis of strategic competition in retail banking when some of the financial firms are non-profit organisations that invest in social activities. Banking literature about competition is fairly large, but the strategic interaction between profit maximizing and non profit maximizers has not been extensively analysed except for Purroy and Salas (1999). In this paper, a completely different approach is taken. An adaptation of Hotelling’s two stage model of spatial competition is developed to take into account consumer perceptions respect to the two different types of financial institutions. The empirical analysis confirms that consumers take into account other features different from the price, such as social contribution or closer service to make a deposit or mortgage decision. These conclusions are of interest in the debate about a firm’s social or ethical activities. It is shown that if consumers value social activities, firms can improve their results by behaving socially responsible.Strategic competition; Hotelling´s model; Spanish banking; Corporate social responsibility

CSR: Transparency and the role of intermediate organisations

Transparency is a crucial condition to implement a CSR policy based on the reputation mechanism. The central question of this contribution is how a transparency policy ought to be organised in order to enhance the CSR behaviour of companies. Governments endorsing CSR as a new means of governance have different strategies to foster CSR transparency. In this paper we discuss the advantages and disadvantages of two conventional policy strategies: the facilitation policy and the command and control strategy. Using three criteria (efficiency, freedom and virtue) we conclude that both strategies are defective. Most attention is paid to the facilitation strategy since governments nowadays mainly use this. In evaluating this strategy we analyse the Dutch case. As an alternative we introduce a third government policy: the development of a self-regulating sub-system. By construing an analogy with the historical development of corporate financial disclosure, we point out that the vital step in the creation of a self-regulating subsys- tem is the creation of strong informational intermediate organisations.self-regulation; self-governance; system approach; social reporting; command and control; strategic and moral assessment of transparency; transparency policy; CSR; infomediaries

Complexity of communicating social responsibility

It is recognised that organisations, consumers and businesses are increasingly more concerned with how business activities affect society. While research has explored specific types of techniques for communicating corporate social responsibility (CSR), there has not been a more general discussion of the considerations that organisations should make when determining the type of communications that should be used. This paper takes a managerial approach, discussing four broad issues associated with the communication of CSR: 1) intensity of action/positioning; 2) communicating action; 3) types of programs utilised and 4) integration issues. It is proposed that by understanding these issues organisations will be in a better position to ensure that the information is clearly communicated and understood by their various stakeholders. The benefits to be achieved will, however, be dependent on the objectives of the communication and thus it is suggested there is not one single appropriate approach to managing these issues.<br /

Consumer Response: Examining Religiosity, CSR Attitude, CSR Behaviour of SMEs Executives in Odisha

It is very essential to study the consumers’ behaviour towards the religious product in order to find out the attitude and behaviour of consumers. The SMEs executives are consumer of various products. Their religion, religious belief holds a special role in product development and use of products. The religiosity of executives of an organisation endorses quality standard and specification to a product. The owners and executives’ thought, belief, attitude and their personal behaviour impacts on innovation and diffusion of product range. The SMEs executives’ acceptance of products from the house of religious organisation indicates their attitude and behaviour. The products of social responsible and religious organisation are promoted to test the religiosity, attitude and behaviour of SMEs executives. The SMEs executives of hindu religion are taken as samples. Data are collected from two places of odisha. The social responsibility values of products are promoted to SMEs executives at the time of sales and promotion of the products to test the consumers’ response towards CSR attitude and behaviour of SMEs executives. After selling the products, questionnaires are given to consumers. The questionnaires are collected after few days of sales and approached for repeat purchase of products from same religious house. The consumer behaviour is taken as the major scale of measurement of religiosity, CSR attitude and CSR behaviour of SMEs executive of Odisha. The personal values of SMEs executives and sales performance of religious organisation are tested to find out the results. The products from the house of THE ART OF LIVING are promoted by its direct distributor ABISHKAR MARKETING in Odisha. Keywords: Consumers response, Religiosity, CSR attitude and CSR behaviour, SMEs executives, Sales Performance

Are Spanish Listed Firms Betting on CSR during the Crisis? Evidence from the Agency Problem

Companies have to continue with their businesses in the current uncertain environment triggered by the economic crisis. Since the decrease in the performance of companies is a reality, academicians, managers and entrepreneur are worried about what may be happening with Corporate Social Responsibility. Because of the strong impact of the crisis on Spain, we are going to study its effect on the CSR behaviour of Spanish companies. Therefore, we analyse whether the performance of the company, as well as some shareholding characteristics, influence CSR before and during the crisis. The results show that large Spanish companies continue to carry out CSR actions despite the effects of the crisis on their financial health. It seems that shareholders are more influential than managers in these strategic and entrepreneurial decisions. Additionally, the presence of a reference shareholder means that companies are more committed to CSR, although a higher percentage of insider shareholders cause the contrary effect

Corporate social responsibility, profits and welfare with managerial firms

This paper analyses the equilibrium outcomes in a duopoly market where firms follow corporate social responsibility (CSR) behaviours under managerial delegation. It is shown that in the subgame perfect Nash equilibrium of the game, both firms emerge as CSR-type, and the firms’ profitability (resp. the welfare of consumers and society) are beneficiated (resp. harmed) by the CSR behaviour. This result is in sharp contrast with the conventional result (established under nonmanagerial firms) that the higher the CSR sensitivity to consumer surplus, the lower (resp. higher) the firms’ profitability (resp. the consumer surplus and social welfare)

Firm voluntary measures for environmental changes, eco-innovations and CSR : Empirical analysis based on data surveys

Despite the increased strategic importance of environmental innovation on the one hand and corporate social responsibility on the other, there are still few studies that show firm voluntary measures create a primary determinant of environmental changes. First, we clarify the meaning of voluntary measures and CSR. Second, we utilize a survey carried out in Luxemburg on firm CSR practices jointly with the Community Innovation Survey 2008 (CIS 2008). We merge them and show through the estimation of a probit model that CSR is an important factor that explains environmental innovation. Thanks to a question from CIS 2008 we can contribute to the literature by developing a new indicator measuring the scale of the positive impacts on the environment coming from the firm technological innovation capacity. A negative binomial regression enables us to estimate a significant and positive effect of CSR and firm value on this scale

Understanding issue complexity when building a socially responsible brand

Purpose of the Manuscript- To discusses the importance of understanding Corporate Social Responsibility (CSR) by analysing the issues that comprise CSR. Without this understanding it will not be possible for organisations to develop responsible brands.Approach &ndash; The paper draws on the existing business and marketing literature to define four aspects of issue complexity. It also draws on a range of real and hypothetical examples affecting local and global organisations to explain the four components.Limitations &ndash; The work is conceptual in nature and additional research needs to be undertaken to better understand how organisations define the CSR issues that they will integrate into activities and how the management of these issues can be undertaken to ensure system wide implementation.Practical Implications &ndash; The work suggests that by understanding the four components of issues complexity organisations will be in a better position to integrate CSR related branding. Without understanding these issues, organisations may potentially unintentionally exaggerate claims or set themselves up to be criticised that they are unfairly exploiting consumers&rsquo; interest in CSR issues.Value- Previous research has documented the value of CSR, but to date there have been only limited attempts to systematically examine how managers could know whether they have considered the issue completely and realistically.<br /