Você está na página 1de 100

The effect of corporate social responsibility on profitability of

multinational companies. A case study of nestle UK (Halifax) limited

1
Abstract

The dissertation provides a comprehensive analysis of the effect of corporate social

responsibilities on firm financial performance. It draws from the corporate social responsibility

as well as environmentally disclosure in their annual reports so as to provide an understanding of

the correlation between the investment in corporate social responsibility and effect of firm

financial performance. The information shall be collected using the questionnaires from

customers, staffs of nestle UK (Halifax) and stakeholders. The three mentioned respondent are

considered important to our research since, they form the main pillars of evaluating the

corporate social responsibility to investment by the company. Will use the information together

with the information from the annual reports to make an analysis of the effect of corporate

social responsibility on firm financial performance and afterwards, provides conclusion and

recommendation for future research.

Currently, CSR has turn to be a significant area of modern corporate study theorem, and the

development of corporate social responsibility activities all over the world is notable. Whilst the

association between corporate social responsibility and corporate financial performance is still

unclear, corporate social responsibility is depicted by management firms as more than an

assortment of distinct practice or inducement motivated by marketing, public relation or other

business advantages. Instead, it is perceived as a detailed set of policies, practice as well as

program that are incorporated throughout the business operations as well as verdict making

process that is aided and rewarded by top executives.

2
Table of contents

CHAPTER ONE..............................................................................................................................9

INTRODUCTION.......................................................................................................................9

BACKGROUND INFORMATION.............................................................................................9

Research objectives....................................................................................................................15

Research questions.....................................................................................................................16

Justification for the study...........................................................................................................16

Brief methodology of the study.................................................................................................18

Organization of the work...........................................................................................................18

CHAPTER TWO...........................................................................................................................20

LITERATURE REVIEW...........................................................................................................20

2.0 INTRODUCTION...............................................................................................................20

2:1 benefits of corporate social responsibility:..........................................................................24

Competitiveness:....................................................................................................................24

Differentiation:.......................................................................................................................24

Cost reduction:.......................................................................................................................25

Employee motivation, retention and recruitment:..................................................................25

2.2 cost of corporate social responsibility:.................................................................................26

2:3 types of corporate social responsibility:..............................................................................27


3
Economic responsibilities:.....................................................................................................27

Ethical responsibility:.............................................................................................................28

Philanthropic responsibility:...................................................................................................28

2:4 theory of corporate social responsibility:.........................................................................28

2.5 corporate social responsibility implementation and measurement:.....................................30

3. Link between corporate social responsibility and financial performance:...........................32

Agency perspective:...............................................................................................................36

Stakeholder perspective:.........................................................................................................36

Resource-based view (Rb):....................................................................................................37

3.2 financial performance measurements:.................................................................................40

RESEARCH METHODOLOGY...............................................................................................43

3.1 INTRODUCTION...............................................................................................................43

3.1.1 Deductive and Inductive Approach...................................................................................43

3.1.2. Quantitative and Qualitative............................................................................................44

3.2.1 Research design.................................................................................................................45

3.2.3 Population and sample size...............................................................................................47

3.2.4 Research instrument..........................................................................................................47

3.2.5 Validity of the research instrument...................................................................................48

3.2.6 Data analysis technique.....................................................................................................48

Tables......................................................................................................................................48
4
Percentages.............................................................................................................................49

.......................................................................................................................................................49

Sampling Design...........................................................................................................................49

3.4.1 Sampling Technique............................................................................................................49

3.5 Data Collection.......................................................................................................................50

CHAPTER FOUR.........................................................................................................................52

DATA PRESENTATION, ANALYSIS AND INTERPRETATION...........................................52

4.1 INTRODUCTION...............................................................................................................52

4.2. Data presentation and analysis............................................................................................52

4.2.1 Questionnaire to staff:...................................................................................................52

Descriptive statistics:..............................................................................................................52

4.2.2. Presentation and analysis of research questions...........................................................58

4.3 questionnaire to external stakeholders (The suppliers)........................................................65

Descriptive statistics...............................................................................................................65

Section c:....................................................................................................................................68

Section c: questionnaire to customers........................................................................................70

4.4 test of hypotheses.................................................................................................................71

4.4.1 Reaffirmation of hypotheses.............................................................................................71

Examination of primary data from customers shopping areas...................................................72

Examination of secondary data (the annual report)...................................................................73


5
SUMMARY, RECOMMENDATION AND CONCLUSION....................................................75

5.0 INTRODUCTIONS:............................................................................................................75

DISCUSSION OF THE FINDINGS......................................................................................75

Corporate social responsibility impact on nestle UK (Halifax)’s profitability......................75

Corporate social responsibility in the community..................................................................75

Nestlé’s financial commitment to corporate social responsibility........................................76

Other benefits nestle derives from corporate social responsibility - value creation.............76

Does nestle embark on corporate social responsibility? - Customer unawareness of

corporate social responsibility programs................................................................................76

5.2 conclusion................................................................................................................................76

Reference list.................................................................................................................................86

ABBREVIATIONS......................................................................................................................108

CHAPTER ONE

INTRODUCTION

BACKGROUND INFORMATION

6
Corporate social responsibilities (CSR) is a theory entailing the practice in which companies on a

voluntary basis integrate the social and environment uplifts in their daily business policy as well

as operations. A company is mainly incorporated to create value by providing goods and services

that the community needs. The current idea of corporate social responsibility means that

companies incorporate social and environment concern in their operations and association with

stakeholders. The idea of corporate social responsibility is the main moral concern revolving

around company’s verdicts and attitude hence where a business must undertake specific activities

or desist from doing it since they are advantageous or destructive to the community is the main

question. Social matters consider ethical deliberation of their own as well as must lead

executives to deem social impact of company’s activities in decision making (Argandoña, 2008).

At present, executives of multinational corporations (MNC) have realized that need that the

environment in which they do business be provided for since their intermediary as well as macro

environment depict direct impact on achievement of company’s objectives as well as its mission

statement. The aim of all profit making companies, as well as even non-profit making

organization, is to maximize profits as well as minimize cost by way of optimal usage of existing

resources to attain the utmost outcome they are in capacity of doing. Profitability is a significant

factor to entire multinational corporations since; it is the main reasons for which they are

incorporated (Bourke, 1998).

Corporate social responsibility entails a company recognizing groups as well as integrating their

requirements and values within the plans and daily verdicts process, hence a means of examining

in the inter-dependent association that exist between business, the economic system as well as

the societies within which they operate. Corporate social responsibility is an alternative of

7
discussing the extent to commitment a company has to its intermediaries community, an

approach of recommending policies on the manner to which commitment may be met and also

tools by which the advantage of a business for comply with its commitments might be identified.

Corporate social responsibility is also considered as the corporate or business responsibility or

community relations. It entails tan approach in which a company makes business verdicts,

products and services provisions, and their efforts to attain an open as well as authentic

philosophy. the association with their workers, customers as well as key stakeholders with

interest in the company operations, the motivation to participate in corporate social

responsibility varies from response to market forces, globalization, consumer and civil society’s

pressure, company aims and many more (Bridget, 2005).

The activities of the company are as result noticeable due to their global reach. In this regards,

there is high inducement to safeguard their brand as well as venture through corporate social

responsibility. The corporate social responsibilities activities in this sector are the mostly

centered on remedy the impact of their business operations on the community. Hence the

company that operates in these sectors frequently provides corporate social responsibility

projects to the community (Carroll Siu, 2013).

Aras and Crowther (2008) mentioned that the multinational corporations undertake corporate

social responsibility in order to meet their financial objectives, social as well as environmental

accountabilities. At its core, it’s just about having a set of values as well as attitude that reinforce

its daily activities, accountabilities, the need for fair transaction, consideration for the society, its

behavior on customer’s services as well as its association with the community. in this regards, the

environmental aspect of corporate social responsibility is depicted as the responsibility to cover

the environmental consequences of the company’s business operations, products and facility,

8
getting rid of waste and emission, capitalizing on effectiveness and productivity of its resources,

reward for externalities and tom reduce unscrupulous practices that may unfavorably affect the

pleasure of the nation’s resources by future generation. in the developing worldwide economy, in

which the internet, the news media as well as the information uprising shed light on business

practice globally, corporations are often adjudicated based on the their environmental

stewardship . Associates in business as well as consumers need to understand what is within the

company. This accountability of business practice implies that for multinational corporations,

corporate social responsibility is no longer an indulgence but necessities. According to

Mazurkiewicz (2004), there is no single meaning of corporate social responsibilities. Based on

the viewpoint, corporate social responsibility entails:

a) A company running its business responsibly in relation to internal stakeholders (shareholders,

employees, customers and suppliers).

b) The duties of the company in association with the government and the world.

c) Business performance as an accountable member of the community that it operate and the

worldwide society.

The first point of view entails the guarantee on good corporate practices, product accountability,

jobs station, right of employees training and education. The second entails the corporate

compliance with appropriate legislations as well as the company’s accountability as a taxpayer,

which guarantee that the state might work efficiently. The third point of view is multi-layered as

well as might entail the company’s association with individual as well as environment in the

societies that it operates, and those that it does business with. Too frequent, achieving corporate

social responsibility is comprehended from the point of view of business kindness to society

9
programs as well as benevolent contribution, but this fails to consider the most treasured

involvement that company has made (Carroll, 2014).

Corporate social responsibility is depicted by management firms as more than an assortment of

distinct practice or inducement motivated by marketing, public relation or other business

advantages. Instead, it is perceived as a detailed set of policies, practice as well as program that

are incorporated throughout the business operation s as well as verdict making process that is

aided and rewarded by top executives. Many firm s have found corporate social responsibility

to depict positive impact on the company’s profits. of the topics linked to corporate social

responsibility , it is environmental resourcefulness that have generated, so far, the greatest value

of measurable data connecting pre-emptive firms with positive financial outcome. Corporate

social responsibility in a fast moving consumer goods (fact) industry might be focused on the

individuality of the socio-economic development challenge of the nations such as the health care

provisions, infrastructural development, educations and more (Carvalho, 2015).

This may not appropriately depict the popular standards or expectation of corporate social

responsibility in terms of consumer safety, fair practices, green marketing consideration on

climate change, social accountability and many more due to effect of economic crisis. Firms are

presumed to be socially accountable due to the fact they anticipate an advantage from the

actions. For instance the advantage may entail the reputation improvement, the capacity to

charge optimum price for the output or the usage of corporate social responsibility to recruit as

well as upheld quality employees. the benefits are considered to offset the high cost linked with

the corporate social responsibility because, the resource need to be allocated to permit the

company to attain the corporate social responsibility objectives whilst the main indicator to

establish the true value if the 21st companies is their capacity to give back to the society part of

10
the income by way of mutual advantageous inducement. there are no doubt that corporate social

responsibility is turning to be essential, even though instinctive, in the current business

environment as community needs are making it vital for the companies to be keen to trendy in

their environment, which guarantees more comprehension as well as good associations between

the company and the community they operate in because, corporate social responsibility

contribute to the welfare of the people (Carvalho, 2015).

Research objectives

The main aim of the study is to examine the impact of corporate social responsibility of nestle

UK (Halifax) on its profitability. But precisely, the research pursues to attain the following

objectives:

.To find out how a company undertake corporate social responsibility as the main associates in

the fast moving consumer goods (FMCG) industry.

.To understand the challenges facing a company in undertaking the corporate social

responsibility practices, if CSR provides assurance to consumer’s confidence as well as security

of depositors’ funds.

Research questions

 How does the company embark on corporate social responsibility?


 What encounters does corporate social responsibility inflict on company?
 Does the company corporate social responsibility provides assurance on the

customers’ confidence level?

Justification for the study

The research is anticipated to make contribution to knowledge in the Provision of information

concerning the corporate social responsibility in relation to companies on FMCG industry as

11
well as to be an important material for academics dissertation in management science concerning

corporate social responsibility. The research will provide information on the impact of corporate

social responsibility on firm’s financial performance in UK’s FMCG industry. Finally, the study

work will provide information on the encounters of the corporate social responsibilities in the

fast moving consumer good (FMCG) industry with recommendations.

The association between the corporate social responsibility and firm financial performance has

been documented in the literature to date. Preferably, corporate social responsibility and firm

financial performance must depict strong positive correlation, but research on corporate social

responsibility and financial performance have yield mixed outcome. These are research that

summarized that the inconsistent outcome of the past research reporting positive, negative or

neutral financial impact were as a result of imperfect hypothetical assessment. According to

McWilliams and Siegel (2000), a relationship between the research of the association between

the social and financial management for venture in research and development are significant

determinant of financial performance of a company, corporate social responsibility depict

positive impact on firm financial performance(Crane, 2008). Also, the correlation between the

social and financial performance depict a strong correlation (Cochran and wood, 1984). The

implementation of corporate social responsibility surpasses the compliance as well as

involvement since it turns to be more social goods, beyond the interest of the company and that

is needed by law. Corporate social responsibility is a procedure that focus on embracing

accountability for the firm’s actions as well as motivate a positive impact by way of activities on

environment , consumer, workers, society, stakeholders as well as other members of the public

who might be deem as stakeholders (Margolis and Walsh 2001).

12
The term corporate social responsibility turned to be famous in the 1950s and has remained a

term employed extensively by many to cover legal as well as ethical accountability, more closely

understood. Corporate social responsibility is mainly taken to be a western phenomenon

because of strong standards, standards as well as the appeal systems that are weak in the

developing nations (Demmerling, 2014). This weak standard makes its more challenging to

companies that practice corporate social responsibilities. Even though wide studies on corporate

social responsibility impacting the firm financial performance has been performed in developed

nations, there is still a scarcity of such research in developing countries. The research therefore

considers filling the gap between the researches on impact of corporate social responsibility of

corporate social responsibility on financial performance (Sharma, 2013).

Brief methodology of the study

The primary data used was collected from questionnaires form the respondent at nestle UK

(Halifax), the consumers, nestles business partners (external stakeholders) and the consumers of

the Nestle UK (Halifax) products. The research population is very large and thus 100

respondent’s form the top level, middle and lower level management were considered

appropriate for the study on the basis of stratified sampling made. this cuts across many division

in the company such as customers survives department, corporate affairs, retails division

market , finance division and other areas that was considered appropriate for the study. 145

customers were chosen by way of random sample. Lastly, five business associates of nestle UK

(Halifax) were interviewed by overseeing sample structured questionnaires for their response in

relation to the research.

13
Organization of the work

The research is planned and presented in five chapters. Chapter one focus on background

information of the research, aims of the research, the research questions, implication of the

research and also the limitation of the research. Chapter of the study entails the literature review.

The review encompass books, appears, publications of previous writers on same topic. Chapter

three focuses on evaluation of nestle UK (Halifax) and their business operations. It explains on

the approach of gathering data into details. Chapter four asses as well as discuss the data

gathered for the research. Lastly, chapter five discuss the findings, conclusion as well as

recommendations for tackling the issues identified in the study.

14
CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTION

Nowadays, with globalization and growing competition between organizations in the world,

these combined factors are leading companies to become more serious towards environmental

and societal matters. Businesses in different industries are getting more consideration for

corporate social responsibility in terms of providing product and services for society during the

last couple of decades. Several organizations started reporting in relation of their ethical, social

and environmental behavior. The concept of corporate social responsibility has turned into a

subject of interest as well. Numerous studies examine the relation between corporate social

responsibility and firm financial performance (Filho, 2008). Many hypothetical perspectives on

the link in the middle of financial and social performance are put forward. Moreover, a lot of

empirical studies investigate the relationship between corporate social responsibility and

financial performance.

There are diverse opinions about the relation between social and financial performance with the

company, as well as the empirical research has not reached at the consensus. Some arguments

argued that corporate social responsibility imposes additional costs and that will affect the

financial firm position negatively (Friedman, 1970). Other viewpoints support Friedman opinion

that corporate social responsibility activities might conflict with firm value maximization.

However, corporate social responsibility activities also could be effective resources for creating

a well reputation which positively affect the long-term firm financial performance (Freeman,
15
2010). Therefore, it is still uncertain how social conducts impact the value of firm financial

performance, also it is necessary to address this gap since corporate social responsibility phases

might create different observations between stakeholders and ultimately impact the financial

performance differently. This research will includes different meaning of corporate social

responsibility and particular social importance, types, theories in order to show how its affect the

firm financial performance from numerous perspective with measurement methods.

2: Meaning of corporate social responsibility (CSR):

Numerous corporate social responsibility definitions were produced by the researchers in the

past taking into account the social, economic, political and environmental setting of that period

since 1950s. No one of a kind definition emerged in most recent couple of decades in the

historical backdrop of corporate social responsibility that can be utilized for all purposes.

Nevertheless, different meanings of corporate social responsibility spread different

measurements including economic improvement, moral practices, environmental assurance,

stakeholder’s contribution, transparency, and accountability. according to the period of beginning

era of social responsibility in fifties, held as an expert researcher of this period has stated a

definition of corporate social responsibility as it is an obligation of management duties for

society and it is a part of improving economic performance. by looking at the concept of

corporate social responsibility throughout the years for example in seventies, friedman (1970)

has presented corporate social responsibility as a relationship between organization and

community and has defined the corporate social responsibility as it is a responsibility of any

business in terms of using all their resources to gain profit by following the rules to develop a

competition without any fraud or deception (Geoffrey2010).

16
Also Hopkins (1998) has develop a new concept of corporate social responsibility on handling

internal and external stakeholders from ethical perspective in nineties, his point of view focusing

on corporate social responsibility activities which must treat the stakeholders of the company

morally or in socially dependable way weather they classified inside or outside the company.

Moreover, Hopkins (2007) also illustrates the concept of corporate social responsibility

activities ought to treat the stakeholders in responsible and ethical manner. The purpose of that

recommendation among social responsibilities is to improve the living standard whereas the

continuous development of corporation profitability (Grazia, 2012).

Mohr et al. (2001) has developed two methodologies which can build up the idea of corporate

social responsibility, firstly, the economic vision which relates to maximize profit and improve

shareholders wealth in the first place. Subsequently, following the corporate social

responsibility activities calling is valuable for all stakeholders. Secondly, the socioeconomic

methodology characterizes corporate social responsibility as expanding the long term

profitability to society and diminished the negative impacts of its actions on society. Abrantes

Ferreira et al. (2010) comes to comparable discoveries showing that the socioeconomic vision

makes the theme of corporate social responsibility more extensive to include advancing social

advantages as a correlated goal for the organizations. This methodology distinguishes that

corporate decisions and their results influence an extensive variety of social specialists, settling

decisions in light of components other than those of economic position (Guler, 2012).

Abrantes Ferreira et al. (2010) have found that corporate social responsibility factors are about

activity which be given from company to society as well as enhancing its present position in

terms of different sorts of activities that assists individuals and environment alongside of

expanding the company profits in the long run. Therefore, the consideration of corporate social

17
responsibility activities is a good way to decreases the company expenses in order to improve

their profit.

Taking the awareness of corporate social responsibility as accepted by the different nations,

freeman and Hasnaoui (2010) investigated the meanings of corporate social responsibility as

advanced by governments or associations that are consultants in four nations trying to build up a

common system to characterize corporate social responsibility. The nations picked include

France and England from the European Union and the United States and Canada from North

America (Guler, 2012). The meaning of corporate social responsibility utilized in these nations

may build up normative measures for the act of corporate social responsibility in national and

multinational businesses. The way that the comprehension of corporate social responsibility by

business associations in the UK does not invent from the government order, but it is reliant on

the individual organization, whereas France and use are focusing on governmental departments’

activity.

Regardless of the vast group of literature on corporate social responsibility, there is still no

integrated and exact definition along these lines, corporate social responsibility has a different

meaning for researchers because it is hard to conceptualize. Therefore, some journalists argue

that absence of a reasonable definition makes it uneasy to conduct experimental studies in

corporate social responsibility. However, all the previous definitions sharing the same idea which

is the company ought to meet social expectations during the preparation of the environmental

management strategies (Guliani, 2016).

2:1 benefits of corporate social responsibility:

Competitiveness:

18
Previous studies on corporate social responsibility and competitiveness is uncommon, in spite

of the fact that it has become exponentially in the previous couple of years. Most literatures on

the relationship in the middle of competitiveness and corporate social responsibility have

focused on attempting to demonstrate that there is a positive relationship in the middle of

corporate social responsibility and financial performance different thoughts have suggested other

approaches, for example, producing a competitive advantage for the company by making

stakeholders value, assessing corporate social responsibility as a risk on key concentration

variables, for example, reputation, or by following a case study that include corporate social

responsibility gives the positive influence in short term profitability in order to a long term

competitiveness . Therefore, the primary concern is McWilliams and Siegel (2001) stated that

there is a relation between corporate social responsibility activities toward competitive

advantage among industry.

Differentiation:

Corporate social responsibility activities as a different strategy to produce products and services

would create a new demand. businesses who implement differentiation strategy frequently seek

after numerous means of differentiation for instance, ben and jerry's, which distinguishes its

items by making extraordinary flavors, utilizing high quality ingredients, supporting the whole

society, and advancing assorted qualities in the working environment. Corporate social

responsibility may be a noticeable method for accomplishing differentiation in line with it allow

managers to improve satisfaction and to accomplish differentiate products and services.

Cost reduction:

19
The business case for corporate social responsibility contends that there are truthful purposes

behind a company to put their resources into corporate social responsibility activities. from an

economic point of view, there is hypothetical rationale and some observational confirmation that

taking part in socially responsible activities can diminish costs and risks to the firm in addition to

improve competitive advantage(Guliani, 2016).

Employee motivation, retention and recruitment:

Corporate social responsibility could likewise build motivation for those representatives who are

motivated by a superior workplace, by taking an interest in voluntary movements. In any case,

employee motivation and retention could bring about expansions in efficiency and cost savings.

The organization may likewise be more attractive to future workforces. On the other hand,

numerous researchers state that corporate social responsibility is helpful to society, as well as to

the organizations themselves, also they stated the a advantages of corporate social responsibility

engagement could arise from different sources including increasing shareholder wealth through

insurance like protection, enhanced risk management, market appeal to customers by planned

methodology, enhanced transparency, and simpler access to financial business sector. All or some

subset of these variables could possibly diminish firm risk of controversial industry firms. God

Frey (2005) claims that ethical capital can provide shareholders with insurance protection related

with intangible assets. Also some kind of corporate social responsibility activities could provide

other advantages like goodwill. According to Waddock and graves (1997) stated that get more

emphasis on social performance will ensure better financial performance in terms of using their

financial resources manpower commitment and other factors effectively. Once stakeholders deal

and understand their social responsible activities, the company more capable to improve their

external reputation in lights of enhances the attention of suppliers and investors.


20
as a result, the benefits of social activities are considered monetary and non-monetary benefits,

the monetary benefits includes direct which reflect as a primary value drivers whereas the

indirect classified as a secondary value drives such as firm competitive advantage that leads to

gain governmental support and well reputation, these advantages are essential specially for

entering a new business region or industry (Aras and Crowther, 2008)

2.2 Cost of corporate social responsibility:

Social activities have different sorts of costs classification. . Weber (2008) recommends that the

continuous costs of these activities are separate from the one-time costs, for example one-time

costs like installation costs, one time donation or any comparable investment costs. The

continuous cost such as fees for patents or licenses, material costs or marketing costs. Additional

types of costs of corporate social responsibility activities promoting to a more exposure of press

and nongovernmental organizations (weber, 2008). Yon et al (2006) have mentioned that social

activities could damage the image of the company if the purpose of these activities were for.

Accordingly, such a mistake might affect the company reputation in negative ways which make it

worse than who not engaged with these social activities including more costs wasting. moreover,

Bhattachary et al. (2011) recommended the risk of social activities will harm the company

competiveness, they also propose that a couple of fundamental standards can diminish this risk

by firstly, improving the market motives by supporting a genuine social activities in order to

attempting to fulfill the particular needs of customers. Secondly, attempt to align the company

objectives in order to satisfy stakeholders goals will lead to increase the value of these social

activities (Hacioglu, 2013).

Weber (2008) stated that corporate social responsibility activities cost are difficult to measure

and conventional accounting systems is not capable to recognize these costs if it is related to
21
corporate social responsibility or it is not. There is likewise a risk of cost distortion because of

the overhead that distributed taking in to account for instance number of units (Haire, 2005).

2:3 types of corporate social responsibility:

It ought to be outlined in a manner that the whole kinds of business responsibilities are

contained. It is proposed here that four types of social responsibilities constitute all out

corporate social responsibility. However, these types are classified as:

Economic responsibilities:

Business associations were made as economic objects intended to give merchandise and

administrations to social individuals. The profit thought process was set up as the essential

motivating force for business enterprise. Before it was whatever else, the business association

was the fundamental economic entity in society. All things considered, it’s to deliver products

and services that satisfy customer needs. Eventually the thought of the profit intention got

changed into an idea of maximize profit, and this has been an enduring from that point onward.

All different business responsibility is predicated upon the economic responsibility company

(Carroll 1991).

Legal responsibility:

Society has not just authorized business to work as a profit relation; business is predictable to

follow the laws and regulations asserted by government. As a fractional satisfaction of the social

contract among business and society, firms are relied upon to seek after their economic missions

inside of the structure of the law (Carroll 1991).

Ethical responsibility:

22
The economic and legal obligations represent ethical standards about reasonableness and justice,

ethical responsibility hold those activities and practices that are predictable or excluded by

societal individuals despite the fact that they are not arranged into law. Ethical responsibility

expresses those guidelines, standards, or desires that reveal a consideration toward what

consumers, workers, shareholders, and the community as reasonable (Carroll 1991).

Philanthropic responsibility:

Philanthropy incorporates those company activities that are in light of society's expectation that

organizations be great corporate subjects. This incorporates effectively related in acts or projects

to advance human welfare or goodwill. Cases of philanthropy include business commitments of

financial resources, for example, assistance to expressions of the human experience, education,

or community. The deference highlight between philanthropic and ethical responsibilities is that

the previous are not expected in an ethical sense (Carroll 1991).

2:4 Theory of corporate social responsibility:

The common idea behind the firm implementing and invest on corporate social responsibility

activities has discovered from the stakeholder theory domain. This theory recommends that

important for any business to reach the long term successful is depending on fulfilling both

economic purposes such as profit maximization and increase shareholders wealth as well as non-

economic initiatives like adopting corporate social responsibility approach. Early research in the

range of stakeholders’ management characterizes a stakeholder in an association as any assembly

or person who can influence or is influenced by the accomplishment of the association's

`purposes .In other words, this hypothesis proposes that organizations are motivated to expand

their targets to contain different objectives in order to maximize profit. Accordingly numerous

23
organizations hold into a corporate social responsibility program as an approach to advance

socially liable activities and arrangements, and successfully react to stakeholders demand (Gupta

2011).

Maignan et al. (2005) observe corporate social responsibility 's linking with business marketing,

recommending that when a firm satisfies its corporate social responsibility , that firm extremely

supports company image, accordingly enhancing firm performance. Also Maignan et al. (2005)

contend that corporate social responsibility involvement would develop the stakeholders’

satisfaction within the company identity. Lay et al. (2010) explore the brand performance on

adopting corporate social responsibility activities and linked it with a positive influence in the

industrial brand equity. Moreover, Torres et al. (2012) utilize a board information containing 57

worldwide brands of 10 nations during the period from 2007 to 2012 and found that a positive

relationship between corporate social responsibility implementation in the firm performance

and the brand equity within the industry.

2.5 Corporate social responsibility implementation and measurement:

different perspectives have presented the best techniques from corporate social responsibility

implementation, Carroll’s (1979) fundamental model represent the vital aspects of corporate

social responsibility as an integration of corporate social responsibility , corporate social

responsiveness and society. Proactivity, accommodation, defense, and reaction are the four

dimensions of corporate social responsibility. These the first responsibility is the economical,

then the legally, ethically and the optional. wood (1991) changed Carroll’s model and stressed

the social responsiveness ought to be taken as environmental, then stakeholder management and

the related issues of management, also illustrated that corporate social responsibility should be

considered by institutionally, organizationally and individually.


24
However, Clarkson (1995) disproved wood's and Carroll’s contention by giving experiential

proof showing that organization does not have to work through the integration of corporate

social responsibility . Firms depend on 15 groups of stakeholders to apply corporate social

responsibility. Maignan and Ferrell’s (2004) also conducted the view point of Clarkson (1995)

which describes corporate social responsibility activities have to be taken to fit with stakeholder

standards. Furthermore, for getting more advantages of corporate social responsibility

implementation strategy the organization need to concentrate on what the stakeholders needs and

requires for developing a good decision through company management.

Additional literature done by McWilliams and Siegel (2001) present a different way to measure

the ideal level of corporate social responsibility which is by cost benefit analysis, this

measurement has developed by social auditing. The measurement is the procedure of observing

and reporting duties in lights of the social impact and ethics conduct. Raghubir et al. (2010)

illustrated the agreed model to help organization incorporate social auditing. This model includes

stakeholders, objectives, assets, returns and the proficiency of cost. This model lead to the

advancement of a preparation that measure the corporate social responsibility activities on

stakeholders (Royer, 2002).

Clarkson’s (1995) have examined corporate social responsibility measured utilizing the kinder,

Ladenburg, domino (kid) information that reflects business thought regarding several stakeholder

issues specifically, the associated five classes of the kid information have been regularly utilized:

(1) employee relations, (2) product quality, (3) community associations, (4) environment issues,

and (5) differing qualities issues. to begin with, the rates the employee relations scores depend on

an organization's level of involvement in employee issues, for example, the guaranteeing of

representatives health and security, the provision of retirement advantages,. Secondly, the

25
product quality scores are assessed as far as how an organization is worried with consumer

relations by offering quality and advanced products in addition by guaranteeing the safety on it.

Thirdly, the community relations by insure that the company does some activities such as

educational services and volunteer initiatives. Fourthly, the environmental activities by

supporting the natural level of firm such as clean energy, providing a friendly product and

services and recycling. Finally, company achieves diversity management operations such as

women employment and minority executives, contracting with minority suppliers (Inouye and

lee 2011).

One significant conclusion in past examination is that the level of linkage in the middle of

corporate social responsibility and CFP might vary depending on the measurement of particular

dimensions of CFP (griffin and mason, 1997). For example, griffin and mason (1997) discovered

more impact of corporate social responsibility on an organization short-term profitability than

its impact on market evaluation of an organization future productivity. Hillman and Keim (2001)

noticed that a composite of the five scores talked about above positively affected market

evaluation, however did not have any notable consequences for accounting based financial

related variables such as return on asset. In a review that analyzed a long term corporate social

responsibility and CFP relationship among organizations in the Malaysian market, Saleh,

Zulkifli, and Muhamad (2008) showed that corporate social responsibility did not impact future

return on asset, in contract of it affected the future market evaluation (Isadore Newman, 1998).

3. Link between corporate social responsibility and financial performance:

A wide range meaning of firm financial performance has also been planned in the literature

(Barney, 2002). Both financial and market definitions have been utilized to think about the

relationship between corporate social obligation and firm performance (orlitzky, Schmidt, and
26
Rynes, 2003). However, following most social responsibility researchers look to realize the ways

that socially responsibility corporate actions can improve or diminish shareholder wealth,

Actually, by adopting such a financial definition focusing on firm performance on how socially

responsible corporate activates influence a company's market value. Market value is

characterized as the cost of a company’s equity multiplied by the quantity of its shares

outstanding. in this manner, this question have been asked from different literature, assuming

managers look for increase maximize profit and shareholder wealth with the industry, is it

appropriate to involve corporate social responsibility activities and increases the cost by that

(Mackey et al. 2007)?

The subject of corporate social responsibility has become expanding consideration as these

decades. The act of corporate social responsibility is still debatable since it obliges firms to start

enhance extra interests in corporate social responsibility. These corporate social responsibility

theories are regularly reviewed through the economic cost benefit systematic lens, and accepted

advantages from corporate social responsibility activities drive corporate social responsibility

judgments. Particular point view stated that corporate social responsibility activities increase

costs without satisfactory advantages, cases of these extra costs such as include creating

charitable donations and creating plans for community development (sun 2012). The most of

corporate social responsibility studies have concentrated on looking at the link in the middle of

corporate social responsibility and financial performance of a firm. The results are to some

degree combined. For instance, Aupperle et al. (1985) use study to evaluate (coo’s) points of

view on corporate social responsibility actions and report a negative relationship between

corporate social responsibility activities and financial performance. Other study adopted by

Frooman (1997) assumed that organizations which perform in light of social irresponsible or

27
illegal technique will affect the shareholder wealth negatively. That point shows the importance

of acting in socially responsible way will improve shareholders wealth.

Moreover, more (2001) concentrates on eight fundamental organizations in the UK store industry

and finds a negative relationship in the middle of corporate social responsibility and financial

performance. although, those contending for a negative relationship in the middle of social and

financial related performance trust that organizations that perform responsibly lead to unearned

competitive advantage in terms of generating cost in contrast of other companies. Friedman’s

(1970) argues that there are obvious economic benefits to social activities with high level of

costs, which will lead to reduce firms profit in order to share wealth. Therefore, this point of

view illustrated the negativity of corporate social performance and the financial performance.

Nelling and web (2009) found no significant evidence that company’s financial performance is

related to corporate social responsibility activities. On the other hand, numerous corporate

social responsibilities -financial performance studies document a positive relationship between

corporate social responsibility and financial performance. Cochran and wood (1984) locate a

positive linking in the middle of corporate social responsibility and financial performance. Also

they bring up that more common measures of corporate social responsibility are expected to

further research around there. McGuire et al. (1988) supported the idea of Cochran and wood in

terms of the positivity of enhancing the corporate social responsibility activities within the firm

performance improvement. Other study adopted by Frooman (1997) assumed that organizations

which perform in light of social irresponsible or illegal technique will affect the shareholder

wealth negatively. That point shows the importance of acting in socially responsible way will

improve shareholders wealth. According to recent studies have been made by Beurden and

Go¨ssling, (2008), they discover that the social activities bring the benefit for wealth

28
maximization in order to improve the relationship with stakeholders that conclude additional

returns for companies. Thus, these positive relations with investors, government, employees and

customers will lead to perform well in today’s society (Heldman, 2010).

Ingram (1977) introduced a study in view of the financial reports from 1970 to 1976 for 287

firms. He found that the reported data on corporate social responsibility activities had no impact

on firm performance at all. After two decades, McMillan (1996) inspected data disclosed by 12

substantial us organizations on corporate social responsibility and marketing response. The

conclusion he attracted was fundamentally the same to Ingram’s. However, Milne and paten

(2002) have done a questionnaire survey comprising 70 senior accountants in the US and

demonstrated that data about corporate social responsibility has appreciation over the long term

for a capital investment decision. griffin and mason (1997) have finished their statistic of 51

articles between the period from 1972 to 1997 to demonstrate the linking point between

corporate social responsibility and CFP, they found that 33 article including a positive relation

whereas 9 articles shown negative relation, and the remaining article represent that there is no

relation between corporate social responsibility and CFP (Stanwick and Stanwick 2000).

Margolis and Walsh (2001) have reviewed a collection of studies, which used 27 particular

information sources. In a way that corporate social responsibility is considered as independent

variable in purpose to confirm corporate social responsibility as a positive influence on

financial firm performance and the other direction is trying to verify if the financial performance

precedes corporate social responsibility by considering corporate social responsibility as a

dependent variable. Margolis and Walsh (2001) also stated that these measurements have

considered both accounting and market measures. The results were 53 per cent had confirmed

that corporate social responsibility and CFP have a positive relationship. On the other hand, 68

29
per cent of the previous study had confirmed that CFP has an effect on corporate social

responsibility. furthermore, according to (orlitzky et al. (2003) study, the outcomes include

almost the same Margolis and Walsh results and found that 22 per cent illustrated that there is no

relationship between corporate social responsibility and CFP. Aguilera et al. (2007) stated that

the majority of evidences have been collected indicates that the most common results show a

positive association between both factors (Sharma, 2013).

Further question have been asked from plenty of researchers as what is the reason of corporate

social responsibility activities are positively affect the financial performance? orlitzky et al.

(2003) represented the answer that corporate social responsibility action improvements through

company performance is a helpful for companies to satisfy their stakeholder and this is the best

way to increase and improve the firm financial performance. Rettab et al. (2008) also asserted

that the importance of this engagement, companies ought to ultimately interconnect their

rationale for corporate social responsibility engagement to stakeholders (Harvard Business

Review, 2013).

Different viewpoint of concepts have been made from diversity of scholars’ to demonstrate the

relation between corporate social initiative and firms’ financial performance, these perspectives

categorized as:

Agency perspective:

Freeman (1984) argues that neglected of agency perspective on corporate social responsibility

from shareholders, managers might exploit organization resources to seek after which is in relate

to their benefit in terms of increase shareholders cost. thus, social performance comes to

detriment of financial performance since the important resources are abused in light of managers

utilities as opposed to being spent on activities might be helpful for shareholders wealth.
30
Stakeholder perspective:

Moskowitz (1972) emphasize the stakeholders’ perspective that organizations have associations

with numerous essential groups such as customers, employees and social which they affect

management positively in line of the ability to accomplish competitive advantage and long term

stability for instance, a good employer socially may get ethically improvement, efficiency and

satisfaction. However, Jensen (2002) argues that there is no relation between satisfying firm

stakeholders and maximizing shareholders value, Jensen uses an excessive part of the structure

of stakeholder theory but highlighted the importance of long term value maximization within the

organization is the common objective (Berg, 2008).

Resource-based view (Rb):

The Rb influence the company performance well and indicates that firms are more capable to

perform better in line with the competitors in order to produce addition shareholder value

depending on applying organizational and human resources efficiently. Erhemjamts et al (2012)

stated that the previous resources have to be valuable, rare and non-substitutable to establish

sustain competitive advantage. Waddock and graves (1997) stated that in an occasion of surplus

resources will lead to better firm performance and also provides more social activities. In other

words, corporate social responsibility is forecasted and a consequences of company

performance. Further, as a company had a good financial performance, it has more ability to

spend on social issues. Therefore, resource based view support that corporate social

responsibility actions are helpful for managers in terms of developing intangible assets such as

brand name which without a doubt will improve the firm financial performance.

Vermeulen and Barkema (2002) also demonstrated that the way in which a firm involves part in

new activities can overall influence the amount of information can be achieved and retained from
31
these activities, at the same time influence the benefit produced from the engagement. They

found that the speed, regularity, and scope in the items and areas of the organizations global

development could fundamentally change the financial advantages of such development. This

viewpoint therefore gives us how a firm can deliberately take part in corporate social

responsibility in addition to maximize profits. That perspectives define corporate social

responsibility related to the activities that managers have chosen. On other words, these

corporate social responsibility activities might be useful for such type of companies and might be

a harmful for other companies as well (Schmidt, 2009).

3.1 The theoretical approaches of corporate social responsibility and corporate financial

performance (corporate social responsibility -CFP):

Using of various theoretical methods clarify the results of the organizations between corporate

social responsibility and CFP, as numerous researches indicated worldwide. Remarkably, there

are four assumptions of the theoretical relationships between corporate social responsibility and

CFP, namely, the trade-off hypothesis; the supply and demand theory of the company; the social

impact of hypothesis; and the theory of modern corporate stakeholder (Saleh et al. 2011). The

four theories broadly examine the influence of corporate social responsibility on financial

performance.

The trade-off hypothesis which presented by Friedman (1970) claims that the only responsibility

of a company is to maximize their profits. Moreover, when businesses engage in social and

environmental actions, it suffers additional expenses as well as decreases the incomes of the

businesses. Hence, according to this theory, the higher a corporation’s corporate social

responsibility level, the lower the CFP (Salzmann et al., 2005). Accordingly, increasing the

involvement of corporations in social actions could growth the aggregate resources consumed by

32
the business, and, as a result, decreases the earnings of the business. Thus, this positions the

business in a damaging situation compared to a business which is not involved in corporate

social responsibility activities. Thus, corporate social responsibility has an undesirable effect on

CFP (moore,, 2001; Vance, 1975)

The supply and demand theory of the business was presented by McWilliams and Siegel (2001).

Conferring to their theory, the level of involvement of a business in corporate social

responsibility activities makes the most of a business’s profits. Steger et al. (2007) argues that in

an equilibrium condition, the demand on corporate social responsibility may be diverse;

however, profit could be maximized or static. Hence, there is no connection between corporate

social responsibility and CFP. This theory is reinforced by empirical findings of preceding

studies that states there is no association between corporate social responsibility and CFP.

The social impact hypothesis created by Cornell and Shapiro (1987) indicates that the

development of a business’s corporate social responsibility activities will improve CFP. Hence,

the anticipated paybacks of executing corporate social responsibility activities will surpass the

expenses of the activities (Steger et al., 2007). This theory highlights that the relationship

between corporate social responsibility and CFP is positive. There are numerous motives to

improve the level of corporate social responsibility activities, such as, improve the brand image

of the corporation, progress synergies with financial institutions, and minimize the risks of the

business. The empirical study tells that corporate social responsibility has an encouraging

influence on CFP (Simpson and Kohers, 2002; Waddock and graves, 1997)

The theory of stakeholder can illustrate the association between corporate social responsibility

and CFP (Cornell and Shapiro, 1987; freeman, 1984). Representation to the stakeholder theory,

the worth of a business is connected to the cost of “explicit claims” and “implicit claims” on a

33
business’s resources. Stakeholders have a clear entitlement on a business including owner-

lenders, human capital, and the government. There are many claims on managing a business

through external stakeholders, which are also known as implicit claims. Cornell and Shapiro

(1987) state that some implicit claims involve the stability of resources, on-time delivery, quality

assurance, safe work environment, as well as participation in social and environmental activities.

The charge that has be rewarded by stakeholders for this claim rest on the business’s condition as

well as the financial strategy suitable for the business (Heldman, 2011).

3.2 financial performance measurements:

Griffin and mason (1997) have looked into 51 literatures on corporate social responsibility firm

implementation and found that different methods have been used to measures firm performance

for instance firm size, return on assets (return on asset), return on equity (roe). The most

repeatedly method used to measure firm financial performance is (return on asset). Mainly,

return on asset is reliably asserted to be an authentic measure of financial performance in

contrast of other accounting measures like return on equity or return on sales. Return on asset is

not affected by the differential level of leverage within the firm. Since return on asset is

absolutely connected with the stock price, a higher rate of shareholder wealth indicates to a

higher return on asset. In considering firm assets for example the manufacturing process, return

on asset is the best sign of firm performance (Mishra and Suar 2010).

Financial performance measures are lag indications and catch recorded accomplishment

emerging from generally tangible assets (Mishra and Suar 2010). Old literature often did not

accomplish to correctly record performance from intangible assets, for example, customer

relations, employee satisfaction, and invention and develop an investment research work, which

are important sources to get competitive advantage. On the other hand, non-financial measures
34
concentrate on a company’s long run profitability components for example; develop a research,

customer satisfaction, efficient procedure, employee satisfaction and other intangible assets

improvement (Kaplan and Norton, 2001). These previous factors have discount cost rather than

getting capitalized, also these actions of intangible assets reduce the current profit on the same

time it generate profit for firm long-term profitability. Non-financial performance measures give

indirect vision of company performance in lights of concentrate on outcomes instead of the

performance in the first place. Financial performance measures are the firm objectives in while

non-financial performance measures are subjective environment. However, both financial and

non-financial measures are utilized for assess firm performance comprehensively (Ittner and

Larcker, 1998).

One basic reason behind the instability about the relationship in the middle of corporate social

responsibility and financial performance is that a difficult issue has bother specialists until this

moment is the issue of measuring CSR. CSR is a multidimensional concept, with activities going

over a wide range of inputs and outputs. These activities similarly occur in different located

industries, different landscapes, and changing historical corporate social responsibility domains.

Further, several problems managerial judgments and organizations behaviors are involved

within corporate social responsibility implementation. Subsequently, little clearness has been

touched related to corporate social responsibility measures, these measures utilized in empirical

work using one dimensional in order to be applied in unqualified samples of organizations. There

is a reasonable requirement for multidimensional measures conducted in wide range of industries

with large companies adopted samples (Kaplan and Norton, 2001).

A reason which makes corporate social responsibility engagements a massive topic inside of a

scholastic context and a pressing item on the corporate plan is the way that worldwide

35
organizations put millions in managing corporate social responsibility projects to meet

corporate social performance (marina et al., 2008). At the point when looking for the meaning of

corporate social responsibility activities it turns out to be clear that it guarantees that

organizations are working in an ethical way. consequently, social, economic and environmental

matters must be considered, by looking above at different perspective of corporate social

responsibility definition and social types which affect the firm performance, in addition to the

techniques of corporate social responsibility measurement that have been used form previous

studies, the pressure on businesses to engage in corporate social responsibility has increased.

Many leaders have responded to these pressures, but some have resisted (Sharma, 2013).

Those who resist typically appeal the tradeoff between corporate social responsibility behavior

and profitability. Additional, when social initiatives are not associated with business objectives,

corporate social responsibility could become an obligation and diminish previously held beliefs

among customers about companies. Scholars have responded by trying to determine the effect of

corporate social responsibility on profitability. However, the results of several empirical studies

of the relationship between corporate social responsibility and profitability have been

inconclusive, reporting positive, negative, and neutral results. Probable descriptions for these

diverse outcomes include changes in operationalizing the variables across studies and an

unreliable relationship mediated by one or more dimensions (Heldman, 2010).

36
CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION

Research methodology is important in gathering information needed for the study. This chapter

therefore entails research design, population as well as sampling size, research mechanism,

rationality and dependability of the data, appraisal of variables, data assessment approach and

limitation of the research methodology. The theory of any research is depending on the

researchers’ principles and assumptions of the way he see it. The majority of scholars have

classified the research philosophy to two categories, positivist philosophy and interpretive

philosophy (phenomenological) (Snieder and Larner, 2009).

3.1 Research Approach

Generally, research approach is developed according to the phenomenon that the researcher

wants to test. Therefore, selecting the suitable methodology for any research is necessary by

following the main purpose and nature of the research.

3.1.1 Deductive and Inductive Approach

Saunders et al., (2007) illustrated the deductive process when the researcher moves forward from

the whole idea of the research to end with specification on it. This is the same meaning of

depending on such a theory to conclude hypotheses, as a result, follow a strategy to test these

hypotheses. The other way is inductive process which begins with observation, after that the

research begins creating a theories taking into account the generated observational results.

Although in this method of research it is capable to adopt headings even after the start point of

the research. Since this research aims to find the impact of corporate social responsibility on firm

37
financial performance, the hypotheses have been developed to test this impact by using the

deductive approach which is the most appropriate methods to earn accuracy outcomes (Saunders

et al., 2007).

3.1.2. Quantitative and Qualitative

Researchers ought to consider the appropriate kind of methodology while doing their research.

The common two types of collecting data are by quantitative or qualitative or in some case using

both at the same time. The qualitative methodology is connected with interpretive model that

related with the activities and opinion of humans which usually are complex and illogical

approach. Also scholars classified it as a subjective as well as an effective technique to use. On

the other hand, the quantitative method is connected with positivism model and has been

classified as an objective or phenomena related to research subject, also it reflect the deductive

logic and it emphasizes that meaningful research can consider the real observation of

phenomena. Secondary data is depending on measuring pervious basis collected from prior

articles, books and journals (Saunders et al., 2007)

There are particular advantages of quantitative method. Firstly, it takes into consideration a more

extensive study which thus, improves the accuracy and objectivity of the outcomes for the

research. Secondly, the results will independent in order to needs less time to proceed. Thirdly, it

is much helpful for analyzing a countless number of statistics. Fourthly, secondary data is a

dependable for social information and lesson subjectivity (Collis, J. and Hussey, R

2009).However, some weaknesses must be considered by using quantitative research, it is hard to

control the environment as long as the respondents answer the question. Secondly, the answers

are incomplete in some cases since it does not reflect individuals’ opinion about the main subject

or could be classified as a limited descriptive data.


38
Under this approach, it appreciates the practical research of identifiable phenomena by way of

arithmetical, statistical or numerical data approach. The objective of this approach is to create as

well as appreciate a numerical model, hypothesis as well as assumption relating to phenomena.

The sequence of appraising the core to quantitative research is important due to the fact that it

provides the main link relating to real observation and numerical expression of quantitative link.

The data that is numerical such as the statistic as would mean that the quantitative research seek

to provide solution to unique question and also collect a sample of arithmetical data observable

from a phenomena(Lye, 2010).

The researcher scrutinizes the data gathered with the help of statistical too with the aim of

creating non-discriminatory outcome .the use of quantitative approach depict same sample size

unlike quantitative research,that would lead to dissimilar approach when it comes to using the

data gathered. The main part of the qualitative analysis is the interpretation of the data collected;

the larger sampling present for the research to quantitative research approach enables outcomes

to be detailed from the research model. In qualitative research, such generalizing capacity is not

appropriate approach. Qualitative research seeks to deal with human understanding as well as

more linked with transferability when the findings fit into the situation outside the research

situation that are determined by the resolute by the similarity of fit entailing the two

situations(Marcm 2014).

3.2.1 Research design

Research designs are the structure of the study focused at ascertaining variables as well as their

association to each other. This is important for the study in obtaining data to permit hypothesis

testing or provide solution to the research question. It is a plan that acts as guide to the examiner

in an effort of creating data for the research. In this study, the research design employed is the
39
survey design. This is a design in which sample subject and variables that are currently under

research are just being observed since they are devoid of any effort to manage to influence them.

The aim of the survey design is focused on identifying the inter-link between variables. the

questionnaires was employed as a tool of collecting information from well-informed respondents

as well as going beyond the observation of the correlation between independent as well as

dependent variables(Maria, 2012).

The idea that the fact of the matter is absolutely autonomous from us is belong to realism

philosophy which generates the positivism bias, which also connected with the researcher

thoughts as a result of social since illustrated. Researchers depend on the positivism theory to

deliver more reliable and sensible results. Also could be known as the information that arises by

relying on this theory is viewed as more reliable in terms of the researchers is following

independent approach. This theory accept that social phenomena could be measured by

researchers, in this manner it is exceptionally corresponded with quantitative approach, for

example, numerical information which accumulated by utilizing techniques as surveys and cross

sectional studies(Marks, 1982).

There is another contention that expresses the interpretive theory, which is basically taking into

account the thought that the fact of the matter is not objective but exceptionally subjective. This

is on the grounds that it is unable to separate the theory from the researchers. This theory highly

recommend to examining and depicting data that are gathered by an interpretive way. Dissimilar

to the positivism technique this theory creates data from qualitative strategies, for example,

interviews, focus groups and the data that has been gained from qualitative

analysis(SpenceEditorial:, Business Ethics).

40
The research design employed in the study therefore entails the use of descriptive design which

leads to the discovery of link between the diverse variables. A descriptive case study was

deeming important to discover causation to identify fundamental principles. The research design

was significant in undertaking a detailed research in which focus was placed on the assumed of

the impact of CSR on firm financial performance.

3.2.3 Population and sample size

The research population is very large, so 100 respondents were chosen from the top level

administration, middle level and the supervisory level which must be an ideal representation of

the population on the basis of stratified sampling. this cut across any divisions in the nestle such

as the corporate affairs divisions, customer’s services division, retails division, marketing

division as well as other division with the company. 145 clients were chosen from clients through

random sampling. Five business associates of nestle provide with questionnaires to implore their

perception on the subject matter of the research. The basis of selecting the sample size and the

samples themselves was based on the significance of information needed from the respondent.

For instance, this research intend to get some few questions from the stakeholders and thus

intend to have a small sample size form the stakeholders while, much information will be

gathered from the external stakeholder more specifically from the society and staff of the nestle

UK, this two sample will command more sample size and thus more information will be realized

from the staff of the nestle and the external stakeholders. This is the basis that forms the sample

size amongst the three key respondents. The sample was categorized based on the size of the

sample and the size of the questionnaire forms that will be supplied to respondents.

The questionnaires were distributed differently since, the population and sample for staff, the

workers and the stakeholder where different and thus, i distributed the questionnaire forms on the
41
basis of highest size of respondent who were provided with the questionnaire forms first who

basically were the community living within the nestle UK (Halifax) followed by the less sample

size which is anticipated to be from the customers of the nestle UK and then the least sampler

size which is anticipated to be from the stakeholders of Nestle UK (Halifax) The different time

of questionnaire forms distribution eventually help in saving on time, cost and money since, the

received feedback simultaneously which enable to organize the work correctly in order to avoid

confusion and mix up of the already filed questionnaires.

3.2.4 Research instrument

The instrument employed in collecting the data for the research purposes was the questionnaires.

The questionnaires entail the appropriate questions specific to the research study. The data

collected from competed questionnaires were examined and used for research. The choice of

numerous research approaches for collecting data depends on the variables to be ascertained, the

source as well as the resources existing at present. Data collection should conduct at interval

adequately recurrent for management reason; frequently collected data will possibly have to

place reliance on personnel providing data. As discussed above, the study aims to collect data in

some ways; primary and secondary data, survey and questionnaires. This data is analysis tool are

identified and ascertained based on its relevance in using the method in collecting data and

analysis and conclusion made on the best data collection tool to be employed in the research.

The questionnaire was intended to identify the current corporate social responsibility as well as

to aid in creating potential framework for CSR. The questions created in compliance with the

expert field of concern, Furthermore, some questions were not related to corporate social

responsibility for instance, “what do you presume about CSR” and why do the company

implement CSR. After successful filling of the questionnaire by the respondent, all feedback
42
provided were matched with the second round questionnaire as well as examined with the use of

statistical tool.

3.2.5 Validity of the research instrument

To be certain of the research instrument to be usable and dependable, as the standards of the

research mainly place reliance on standards of the instruments employed and technique

employed in gathering the data because the two importance of quality research are the validity

and reliability, the examiner guarantees that the question interdependent on the basis of the

following standards;

 The questions were created in a manner that it is simple for the respondent to

comprehend them.

 The questions enquired were less and appropriate to create the needed

information.

 The question needed answer that was direct and correct intended question are

proportionally answered fairly with no biasness.

Because rationality is the extent to which the instrument employed appraised the envisioned

measures, the correctness of the study instrument being dependable if the data gathering

procedure is steady and dependable (Mermod, 2008).

3.2.6 Data analysis technique

The data analysis was designed to address the research question of the research. The main aim of

creating CSR index is to appraise the data with the use of quantitative tool in order to permit

43
more evaluation such as understanding the connection between the CSR and company financial

performance. The statistical tool used in examining the data collected in the research is:

Tables

Tables are efficient and also give a summary of the quantitative data. They are employed to

organize facts as we’ll as figures in column and rows.These facts and figures might be

methodically investigated. In this regards, tables are good for pour research purposes.

Percentages

Percentages are important in converting frequency counts to percentage. Percentage theorem is

important in showing the respondent’s distribution as per their response. The benefit of

percentage for our research is that, it will give an overview of the population and simple that is

simple to interpret which makes percentage method good for our research.

Sampling Design

According to Cooper and Schindler (2004), a sample is a subset of population elements whilst

sampling is related with the collection of individual observations aimed at yielding some

understanding concerning the population of concern for statistical references. The intent of

sampling design is important when it is impossible to research the whole population data. For our

study, the researcher was not in a position to research the entire population because of volume of

limits that entailed time, cost and size of the populations. The examiner developed a small group

of 250 respondents from the population that is representative of the whole population for

research.

44
3.4.1 Sampling Technique

The research was a survey where 250 respondents within UK Halifax factories were sampled. I

used systematic sampling in order to select respondent because the target population is deem

consistent , the first 10 responded were provided questionnaires to fill them and return, then

another first 10 at subsequent time and the procedure went up to sampling of 250 respondents.

3.5 Data Collection

The research employs two key data collection method; the primary data which entails the

collection of first hand information which will be the use of questionnaire for our case study and

secondly, the secondary data will entail he use of annual report in order to collect the second

hand information for analysis. The two data collection methods are explained in detailed below:

3.5.1 The Primary data

Primary data was on the basis of questionnaires in which collected data from the company staffs,

the stakeholders and the customers in understanding the impact of CSR on firm financial

performance. The primary data used was collected from questionnaires form the respondent at

nestle UK (Halifax), the consumers, nestles business partners (external stakeholders) and the

consumers of the Nestle UK (Halifax) products. The research population is very large and thus

100 respondent’s form the top level, middle and lower level management were considered

appropriate for the study on the basis of stratified sampling made. this cuts across many division

in the company such as customers survives department, corporate affairs, retails division

market , finance division and other areas that was considered appropriate for the study. 145

customers were chosen by way of random sample. Lastly, five business associates of nestle UK

(Halifax) were interviewed by overseeing sample structured questionnaires for their response in

relation to the research.

45
3.5.1.1Questionnaire

The research employs this approach majorly in collecting data for decision making.

Questionnaires entail filling of the form by the respondent individually. Questionnaire may be

handed out and collected at a later date. This approach may be adopted for the whole population

which may be used to gather data frequently for specialized study, a questionnaires requires the

respondent to fill in the questionnaire personally as well as o requires a superior level of literacy

in which there is numerous languages, a questionnaire must be prepared to take care of numerous

languages of the target group in the research. In order to collect a wide sort of data from the

respondent, questionnaires must be simple and exact with the target questions. Questionnaires

should be brief as well as where the questioners is being provided to a sample population then it

might be prepared to many smaller targeted questions (Sarantakos, 2005; (Ghauri and Grønhaug,

2005).

3.5.1.2The secondary data

The secondary was collected from the annual report of nestle UK (Halifax). Secondary data was

performed in order to get send hand information such as the use of annual report to understand

the extent to which the company invested in CSR and its impact on the company financial net

profit realized each financial period for the last four financial periods. The result provided will be

sufficient in providing an information in order to appraise the correlation between the amount

invested in CSR activities and the reported net profit each financial period to undertake the

impact of CSR investment on firm financial performance. The significance of the secondary data

is to find the out gaps in past studies concerning impact of CSR on firm financial performance.

Keeping in mind the purpose to accomplish the ideas of this research, positivism methodology

was considered for some reasons according to Ryan et al. (2002). Firstly, positivism

46
methodology is more appropriate to be utilized as a part of financial needs. Secondly, this

research begins with hypotheses to find the relation between variables to reach to the outcomes

from the gathered data, so the method of this study of work is in accordance with the positivism

landscape. Finally, utilizing positivism approach permits researchers to comprehend the event

causes and effect (Cohen et al., 2000). This study plans to find the effect of corporate social

responsibility on the financial performance of a company by using positivism approach.

In this regards, annual report will be important for this research since, they were the main

frequent medium for CSR disclosure as well as getting information on accompany. It is intricate

to identify every source provided by the company that entails the CSR information. Where the

research seems to deem CSR as every document and some are missed a firm’s score will not be

precise. Annual reports are the very accessible medium since, they are accessible on many

databases and thus each registered firms generates their annual report that is very dependable.

This theory highly recommend to examining and depicting data that are gathered by an

interpretive way. Dissimilar to the positivism technique this theory creates data from qualitative

strategies, for example, interviews, focus groups and the data that has been gained from

qualitative analysis (Deegan and Rankin 1997).

47
CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1 INTRODUCTION

In this chapter, the outcome of the data analysis was presented. The data were gathered and

processed in response to the problem identified in chapter one of the dissertation. Three

fundamental objectives led to collecti0n of data and afterwards the data analysis. The objectives

were to consider how the company embarks on corporate social responsibility as well as what

their encounters of whether the corporate social responsibility inflict on company and lastly, if

the company corporate social responsibility provides assurance on the customers’ confidence

level. This chapter entails the presentation, evaluation and interpretation of the data collected

from the field in using the primary source (questionnaires) and the secondary source (annual

report). The interpretation of the data collected will depict the effect of corporate social

responsibility of firm financial performance

Response Rate

Two hundred fifty questionnaires were distributed tom the respondents, one fourth five were sent

to customers and five were sent to stakeholders while hundred fifty were sent to supplier of

nestle UK (Halifax). However, 99% of the questionnaire were good and used for the research

since, it was returned by the respondent fully filed and correctly. Six more questionnaires were

returned by the suppliers which were deem not usable. The unused questionnaire forms depict a

note on the reasons why the respondent did not finish the survey, or just partially finished with

main part of the survey being blank or one respondent created and revised sections in such away

48
that might not be hard to be entered in the questionnaire forms devoid of the stern interpretation

and modifications.

Out of the 244 retuned questionnaires, respondent rated 86%. From the analysis of the collected,

the response rate depicts more than 90% of the respondent interviewed were of the opinion that

the investment in CSR have an impact on financial performance of the company. 10% of the

response rates were either selected due to errors in filling the questionnaires or the questionnaires

were not filled correctly. Not every male and female respondent provided the same feedback.

Out of the 250 survey undertaken, 5 five were distributed to the stakeholder by contracting them

through emails and 150 questionnaire were distributed to customers who were randomly chosen.

149 questionnaires were retuned back from the customer leading to 99% response rate. The

response from the five stakeholders created 100% response since, five out of five response rate

was received from the respondents. The questionnaire distributed to suppliers had a 94%

response rate since, 136 of 145 questionnaires were retuned fully completed, and nine

questionnaires were disregarded since they had errors and were incorrectly filed. (Note; through

the Email, a arbitrarily chosen respondent pointed out reluctance to fill out the questionnaires

before being emailed, as much as the questionnaire was mailed it was counted as non-response)

Cross tabulation of the difference response rate between male and female responded (The

customers)

Male Females Total


Do you understand corporate social responsibility 12 25 37
Do you use nestle products? 8 18 26
What impact of the CSR projects on the
community 10 27 37
Total 30 70 100

49
Graphical presentation of the difference response rates between male and females

From the above table and graphical presentation, it is apparent that many of the females

respondent had their question filed with positive criticism. It implies therefore that,

female’s response is concern with the impact of CSR in the community. Furthermore, the

respondent from customers of nestle depicts that many positive response came from

females. This might be due to the fact that many of respondent are females and thus we

will be expecting high volume of response from females. The general tendency of the

response rate depicts that there were different opinion between males and females of

different diversity concerning the impact of CSR on firm financial performance. Our data

analysis depicts that moment are more concern about the effect of CSR unlike the male

counterpart. This forms the basis why much of our respondent were females since, in order

together an in-depth information, we centered on are that we can get mire sufficient

information hence, our data comprised of 70% women and 30% males.

Cross tabulation of the difference response rate between male and female responded (The Staff)

50
Female
Male s Total
. Is there any impact of Nestle UK investment ion CSR on the
community 16 35 51
Do Nestle UK take advantage CSR investment other than profit
creations? 12 25 37
What do you think about Nestlé embarking on CSR? 2 10 12
Total 30 70 100

Graphical presentation of the difference response rates between male and females

Many response from nestle staff were females and they gave different opinion on CSR and firm

financial performance as compared to males. This depict that even females nestles are more

concern about the extent of company involving in CSR activities. Both the women working with

the nestle and the women who are the customers of the nestle depict close similarities concerning

the impact of CSR and this concludes the fact, in general, women are more concern about the

CSR activities and companies involving as compared to males.

4.2. Data presentation and analysis

4.2.1 Questionnaire to staff:


51
The table 4 below depicts the recommended answer as well as number of respondent with the

percentage of respondent to each

Descriptive statistics:

Section a

Table 4.1.1.1: sex distribution of respondents

Sex frequency percentage


male 30 30%
female 70 70%
total 100 100 %
Source; field survey 2016

Graphical representation of the nestle staff respondents

Source; field survey 2016

Fig: 4.2 sex distributions of nestle staff (bar chart)

Source; field survey 2016

52
The table 4.1.1.1 depicts that 30% of the respondent are male whilst 70% are females. The

implication is that nestle UK (Halifax) has a fair and satisfactory policy on job opportunities for

women. In this regards, the feedback provided by nestle will be inclusive since, result will not be

biased and inclined to one sex. Therefore, the feedback provide from the staff will be relied upon

in concluding on the impact of the company investment in corporate social responsibility on net

profit (Ros, 2008).

Table 4.1.1.2.Distribution of respondent’s age bracket

age frequency %

16-24 22 22%
25-34 46 46%
35-44 24 24%
45 and above 8 8%
total 100 100%
Source; survey 2016

53
Fig: 4.5 age distribution of nestle staff

Source; survey 2016

The table 4.1.1.2 above, it can be observed that the 22% of the respondents range between the

age of 14 and 24 while 46% are within the age bracket of 25 to 34, 24% being with the age

bracket of 25 to 44 and 8% are in the age bracket of 44 and above (Isadore Newman, 1998). This

implies that many our respondent are mature and thus, they will understand the aim of the

respondent, the question needed and the answers expected from them as far as CSR and firm

54
financial performance is concern, this will ensure that information gathered is not misleading and

be relied upon in making a final decision on CSR and firm financial performance.

Table 4.1.1.3 Job levels respondents

status/position %
Frequency
low level manager 12 12%
middle level
73 73%
manager
top level
15 15%
management
Total 100 100%
Source; survey 2016

Fig: 4.7 position distributions of nestle staff (bar chart)

From the table 4.1.1.4 above, it can be observed that 12% of the respondents are the low level

managers, 73% being the middle level and 15% being the top level management. Many of our

information will be collected from the middle level mangers since, we believe that managers at

times will not be open about the extent of investment in CSR and consequently, we deem that

55
middle level management is the focal point for our information gathering since; this is the best

level to gather data for analysis(Rühmkorf, 2015).

Table 4.1.1.4. Work experience distribution of respondents

length of time frequency


less than a 7 years 62 68%
at 7 years and more 38 32%
Total 100 100%
Source; survey 2016

The table 4.1.1.5 above depicts 68% of respondent being less than a 7 years working experience

while 32% depict more than a 7 years working with nestle UK (Halifax). The implication is that

information obtained from the questionnaire was from staff with sufficient working experience

from nestle UK (Halifax), making the information dependable for analysis (Pam Denicolo,

2012). Our question is structured in such as a way that the information that is strategic is

collected from the responded with more than 7 years experience whilst information that is

general such as the weather investment in CSR would lead to growth in profit will be centered on

respondent with less than 7 years experience, in this regards, categorization of respondent in

terms of years of experience and nature of question asked based on their level of experience

would provide a precise information that is wide and inclusive which will aid the researcher in

understand the extent of CSR engagement by Nestle UK and its impact on net profit of the

company (Sabri, 2014).

Table 4.1.1.5: education qualification distribution of respondents

qualification frequency %
Ssce 14 10%
Hand 21 23%
b.sc 24 27%
Ba 13 14%
mba/m.sc 14 16%
others 14 10%
56
total 100 100%
Source: field survey 2016

Fig: 4.8 work experience distribution of nestle staff (bar chart)

This table 4.1.1.5 above reveals that 10% of the respondent has the Ssce, 23% of the respondent

has Hand, 27% of the respondent have B.Sc., 14% have Ba, 16% of respondent have Mba/M.Sc.

and 8% have other qualifications. It is apparent from the above response that, many of the staff at

Nestle UK learned with Many having experience in B.sc (Bachelor of Science). The level of

experience depicted above is an indication that many of the staff at Nestle UK are knowledgeable

and thus the question asked in the questionnaire is comprehensible and will be answered precise

by the responded, the reason of understanding the level of education for the staff at Nestle Up is

that, it will ensure that the data collected can be sufficiently relied upon in making a financial

decision concerning Nestle UK involvement in CSR and its impact on the company’s net profits

(Sabri, 2014).

57
Table 4.1.1.6: professional qualification distribution of respondents

qualification 19 %
Ace 23 23%
CIM 28 28%
ACCA 19 19%
CIBN 16 16%
others 14 14%
total 100 100%
Source; survey 2016

The table 4.1.1.6 above depicts that 23% of respondents have ACA qualification, 28% having

CIM qualification, 21% having ACCA qualification, 19% of respondent having CIBN

qualification and 14% of the respondent are having other qualification.

4.2.2. Presentation and analysis of research questions

6. What do you think about nestle UK (Halifax) embarking on corporate social responsibility?

Table 4.2.1.1: respondents awareness on nestle UK (Halifax) embarking on corporate social

responsibility

responses frequency %
necessary 36 40%
compulsory 27 24%
voluntary 14 10%
beneficial 23 26%
total 100 100%
Source; survey 2016

from the table 4.1.2.1 above, it can be depicted that 40% of the respondent are of the opinion that

nestle UK (Halifax) embarking on corporate social responsibility is appropriate, 24% are of

the opinion that it is mandatory ,10% consider that it is charitable and 26% feels that it is

advantageous.

7. What effect has the programme had on the society?

58
Table 4.2.1.2: respondent replies to impact of the corporate social responsibility projects/programme

on the society

responses frequency %

positive 80 80%
negative 0 0%
neutral 20 20%
total 100 100%

From the table 4.1.2.2 above, it can be observed that 80% of the respondents believe that the

impact of corporate social responsibility is positive while 20% are neutral. No respondent

commented any negative about the impact of corporate social responsibility on society

(Boubaker, 2014).

8. Are there other advantage that nestle UK (Halifax) realizes other than profitability from

the implementation of corporate social responsibility projects?

Table 4.2.1.3: respondent responds to other advantage that nestle UK (Halifax) realize

other than profitability from the implementation of corporate social responsibility projects

responses frequency %
large customer base 42 49%
customer confidence 21 24%
good corporate image 16 19%
other advantages 7 8%
total 86 100%

From the table 4.1.2.3 above, it can be observed that 49% of the respondents think that nestle UK

(Halifax) benefits the large customer, 24% are of the opinion the company will have customer

confidence, 19% assume good corporate image and only 8% assume other advantages realized

59
from execution of corporate social responsibility program of social responsibilities other than

profits (Samuel, 2009).

9. Profit is improved by the action of corporate social responsibility of the company?

Table 4.2.1.4: response from respondent on view of growth in profit due to corporate social

responsibility

respondent frequency %
strongly agree 24 27%
agree 38 42%
unsure 16 18%
differ 12 13%
strongly differ 0 0%
total 100 100%

Figure 4.2.1.1 response from respondent on view of growth in profit due to corporate

social responsibility

the table 4.1.2.4 above it can be depicted that 27% of the respondent concur strongly, while 42%

concur, 18% unsure with 0% strongly differing that profit grew due to nestle activities of

60
corporate social responsibilities. Even though I could not have right of access to the records of

nestle UK (Halifax), the outcome from the respondents depict a growth in profitability.

10. Profit declined due to involvement in corporate social responsibility of the company?

Table 4.2.1.5: respondent response to question

respondent frequency %
strongly approve 0 0%
approve 10 11%
unsure 19 21%
Differ 47 52%
strongly differ 13 15%
Total 89 100%

61
it can be observed from the table 4.1.2.5 above that, 0% of the respondent strongly approves,

11% approve, 21% are unsure while 15% strongly differ that declining in profits is due to

company involvement in corporate social responsibilities.

11. corporate social responsibility depicts substantial on the profitability of nestle UK (Halifax)?

Table 4.2.1.6 respondent response

respondent frequency %
strongly approve 0 0%
approve 12 13%
unsure 17 18%
differ 46 49%
strongly differ 19 20%
Total 94 100%

The table 4.1.2.6 above depict that 0% of the respondent strongly approve, 13% approve, 18%

are unsure, 49% differ and 20% strongly differ that accountability of corporate social

responsibility depict substantial impact on profitability for nestle UK (Halifax). The implication

is that many of the respondents are of the opinion that corporate social responsibility depicts

impact on company’s profits.

12. Does corporate social responsibility depict impact on the profitability of nestle UK (Halifax)?

Table 4.2.1.7: respondent response

respondent frequency %
strongly approve 17 20%
approve 22 26%
unsure 3 4%
Differ 0 0%
strongly differ 0 0%
Total 42 49%

62
From table 4.1.2.7 above, it can be depicted that 20% of the respondent strongly approve, 26%

approves, 4% are unsure the rest depict 0% of response that the corporate social responsibilities

depict impact on the profitability of nestle UK (Halifax). This approves question13 that many of

the staff believes that corporate social responsibility impact on the profitability of nestle UK

(Halifax).

13. Does corporate social responsibility provide assurance on customer contentment and

corporate loyalty?

Table 4.2.1.8: respondent response to question 13

respondent frequency %

strongly approve 40 40%


approve 24 24%
unsure 15 15%
Differ 21 21%

strongly differ 0 0%
Total 100 100%

the table 4.1.2.8 above show that 40% of the respondent strongly approves , 24% approves, 15%

were unsure while 21% differ, 0% strongly differ that corporate social responsibility provide

assurance on customer contentment and corporate loyalty as well as security depositors funds.

Section B.

4.3 QUESTIONNAIRE TO EXTERNAL STAKEHOLDERS (THE SUPPLIERS)

The table below depicts the recommended solution and number of respondents with the

percentage of respondent to each.

Descriptive statistics:

63
Table 4.3.1.1 sex distribution of respondents

sex frequency percentage


male 2 40%
female 3 60%
total 5 100%

From the table above, it can be observed that 40% of the respondent is male and 60% are

females. This would mean that our results from the respondent will be dependable since, the

result will be wide and inclusive in terms of gender based hence, the result provided by the

respondent will not biased and misleading in concluding ion the impact of CSR on financial

performance for nestle UK (Halifax).

Table 4.3.1.2: corporate relationship

length of relationship frequency %


less than a 7 years 1 40%
more than a 7 years 4 60%
total 5 100%

the table 4.3.1.2 depict that 40% of the responded have less than 7 years association with nestle

UK (Halifax) while 60% have more than 7 years association with nestle UK. Many of the

respondents are having a long term being with the company since, provision of good products

and services that consider the need for good governance is what drives people to buy Nestle

products as well as associate with the company. The impact is that, Nestle UK will realize

improved profits each financial period as depicted by the growth net profits in the annual profit

for Nestle UK.

Table 4.3.1.5 level of transactions with nestle UK (Halifax)

level of transaction frequency %


high 3 60%

64
medium 2 40%
low 0 0%
total 5 100%

From the table 4.3.1.5 above, it can be observed that 60% of the respondent has the high level of

transaction with nestle UK (Halifax). The implication is that many business partners have

confidence in nestle UK (Halifax) in comparison with 40% and 0% for medium and low

transaction correspondingly. The higher the level of transaction, the better for nestle UK

(Halifax) since, the company will realize improved profits.

4. Which of these other Multinational corporations do you partner with? Unilever ( ) Cadbury

UK ( ) PZ Cussons UK ( ) Other MNC ( )

Table 4.3.1.6: respondent’s response to question above

responses frequency %
Cadbury UK 5 46%
Guinness UK 1 10%
Uniliver UK 4 37%
other multinational
1 10%
corporations
total 11 100%

From the table 4.2.1.1 above, it can be observed that 46% of the respondent does business with

Cadbury UK, 10% do business with Guinness UK, 37% with Uniliver UK and 10% do business

with other multinational corporations (MNC). It means therefore that, many of the supplies do

business with Nestle UK. This might be attributed by the good governance compliance by Nestle

UK and also demanding the same governance compliance within the supply chain management

of Nestle UK and its stakeholder. This nature of supply chain management that observe

environment leads to growth in sex of partners who do business with nestle since, a sustainable
65
environment attract more customers and reduce less legal implication for the company and the

suppliers(Siegel, 2001).

Many suppliers are always associated the good supply chain management practices that embrace

good governance in terms of environmental safeguards. This is an indication that, to make more

profits company need not only invest in community projects as a way of CSR engagement as

well as consider the sustainability standards with their supply chain in order to encourage large

customer base and supplier good association. This will ensure that the production capacity for

Nestle UK will be steady hence making the company experience gain in net profit since, a steady

supply of input will meet the steady demand of Nestle Up product. Steady supply of input is

always associated with engagement with suppliers that embrace good governance in terms of

environmental safeguard which is the case for nestle UK suppliers.

5. Are you aware that nestle UK (Halifax) embarks on any programme that is valuable to the

people in your society?

Table 4.3.1.7: respondent’s response to question above

responses frequency %
yes 5 100
no 0 0
undecided 0 0
total 5 100

From table 4.3.17 above, it can be observed that 100% of the respondent confirm that nestle UK

(Halifax) embarks on program that is valuable to the society and 0% did not degreed. This is

good indication of the good corporate governance assumed by Nestle UK in ensuring that the

sustainability compliance is up to date and in compliance with international accounting

standards(SpenceEditorial:, Business Ethics). The benefit of good governance is that, the

66
company will have good corporate image in the society and the public due to active engagement

in corporate social responsibility, which in turn leads to growth in net profit for the company.

6. What impact has the program had on the society?

Table 4.3.1.8: respondent responds to question to the question above

responses frequency %
positive 5 100
negative 0 0
neutral 0 0
total 5 100
From the table 4.2.1.3 above, it can be observed that 100% of the respondent is of the opinion

that the impact of corporate social responsibility is positive while no respondent had negative or

neutral responded as observedReveals that all (100%) of the respondents felt the impact of

corporate social responsibility is positive.

7. Are there any other advantages that nestle UK (Halifax) benefits other than profitability from the

involvement in corporate social responsibility?

responses frequency %
large customer base 5 100
customer confidence 5 100
good corporate image 5 100

the table 4.2.1.4 above depicts that 100% of the respondent are of the opinion that nestle UK

(Halifax) will advantage from large customer base, 100% believing that the company will have

confidence on customers, 100% are of them opinion that nestle is having a good corporate image

with the community and 100% of the respondent consider that nestle UK (Halifax) will

advantage from other benefits that might be realized from involvement of corporate social

responsibility other than profits(Longest, 2014). It analysis of the above responded is that, large

customer basis is as a result of company involvement in corporate social responsibility since,


67
where the company is having a good relation with its stakeholders including the customers, there

shall be a growth in company image since, customers are always associated with those

companies that actively engage in CSR activities (Vidaver, 2008). The impact of this engagement

is that, there shall be increase in revenue and the net profits subsequently.

Section c:

8. Do Profit increases as a result of company involvement in corporate social responsibility?

Table 4.3.1.10: respondent’s response to question above

respondent frequency %
strongly approve 3 60%
approve 2 40%
unsure 0 0%
Differ 0 0%
strongly differ 0 0%
total 5 100%

from the table 4.2.1.5 above it is apparent that 60% of the respondent strongly approve that profit

increase due to company involvement in corporate social responsibility , 40% approves whiles

pother are 0% implying that they are unsure, differ and strongly differ respectively. The

implication is that many of the respondents consider that profit of nestle UK (Halifax) is growing

due to company involvement in corporate social responsibility (Watts, 2001).

9. do corporate social responsibility depict substantial impact on the profitability of nestle

UK (Halifax)?

Table 4.3.1.13: respondent’s response to question above

respondent frequency %
strongly approve 5 100%
approve 0 0%
unsure 0 0%
Differ 0 0%
68
strongly differ 0 0%
total 5 100%

The table above depicts that 100% of the respondent strongly agree that corporate social

responsibility depict substantial impact on the profitability of nestle UK (Halifax) while 0% of

the respondent, agree, unsure, differ not strongly differ .The implication is that, there is a strong

correlation between the company involvement in corporate social responsibility and the growth

in net profit. The respondent are the main beneficiaries of the CSR project and their opinion

concerning company involving in CSR activities would depict a true situation of the company

engaging in corporate social responsibility. In this regards, the response above is a true depiction

of the advantage of engaging in corporate social responsibility with regards to growth in the

company profits (Weber, 2008).

SECTION C: QUESTIONNAIRE TO CUSTOMERS

Table 4.4.1.1: sex distribution of respondents

sex frequency percentage


male 68 47%
female 77 53%
total 145 100%
Table 4.4.1.2 customer’s responds on advantage of corporate social responsibility

responses frequency %

large customer base 57 39%


customer confidence 45 31%

good corporate image 35 24%

other benefits 8 6%
total 145 100%

69
4.4 test of hypotheses

4.4.1 Reaffirmation of hypotheses

h0: corporate social responsibility depict no an impact one profitability of nestle UK (Halifax)

ltd.

h1: corporate social responsibility depicts an impact on the profitability of nestle UK (Halifax)

ltd.

Table 4.2.1.10 response of nestle staff and nestle business partners

response required staff’s responds business partners

(x) responses (y)


strongly approve 19 5
Approve 27 0
Unsure 3 0
Differ 0 0
strongly differ 0 0

Examination of primary data from customers shopping areas

145 customers were selected on a random basis from sample of 250 populations. The data

collected from the customers assumed the shape of structured open as well as closed ended

70
questionnaire with examiner and with their feedback. Many of the random selected data were

made of 77 females and 68 males. The justification females were preponderant in the sample

population for the region under research. Ages were fewer factors for the criterion due to the fact

that customers were unwilling to disclose their age (Weygandt, 2009). The examiner chooses

customers between the age of 18 and 54 on an assumption basis.

4. Have you heard about nestle UK (Halifax) ltd?

120 out of 145 which 83% have heard of nestle UK (Halifax).

4. Do you use nestle products?

98 out of 145 of the respondent which 67% uses the variety of nestle products such as the ideal

milk, Milo and coffee.

5. Will you be buying nestle product?

108 of the respondent would prefer to continue using the Nestle products in relation to other

product from nestle UK (Halifax) competitors which implies that 97% of the customers are loyal

to nestle UK (Halifax).

6. Do you understand corporate social responsibility?

72out of 145 of the respondent which is 50% understood the corporate social responsibility

7. Are you aware whether nestle has embarked on corporate social responsibility?

65 out of 145 of the respondents which is 45% are mindful of nestle embarking on corporate

social responsibility plan are not able to identify which program as well as which areas of the

community is affected. This recommends that the communiqué between the customers and nestle

UK (Halifax) on corporate social responsibility is deprived.

As much as nestle is having increased investment in corporate social responsibility, without good

communication with the community, the CSR project will be viable and the company will be

71
wasting more cash since, good communication between the company and the community is

important since, it will lead to improved understanding between the company objective of

investing in CSR and the need for continued community participation ion CSR objectives. As a

result, good communication would lead to customer’s contentment in CSR hence making the

customers and the community loyal to the company’s product which in turn will make the

company’s brand image well recognized (Zhao, 2014).

Good communication skills would lead to less friction and misunderstanding with the local

authorities within Nestle UK since, the company will be in compliance with the governance

principles and the law. This generally will lead to growth in customer base, improved association

the supplier and the customers hence making the company y to realize a growth in net profit each

financial period. The general implication here is that, where a company investment in CSR as

well as engagement the community, there shall be a drastic growth in net profits (Zu and Song

2008)

Examination of secondary data (the annual report)

The data collected from the secondary sources entails the annual report for nestle UK

(Halifax) as evaluated below

amount spent on corporate social profit after tax ($

responsibility ($ millions) million


2012 212 10,611
2013 200 10,015
2014 289 14,456
2015 287 14,339

72
It can be observed in the above table and gap that there is a strong correlation between the

reported net profit and investment in corporate social responsibility. For instance, in the year

2012, when the value of spent on corporate social responsibility was $212 million. The

company realized a net profit of $10,611 million, growing to 2015 when the company reported

net profit of $14,339 million with an investment in corporate social responsibility with $287

million. It is therefore evident that a there is a strong correlation between investment in

corporate social responsibility and firms financial performance. The annual report can

substantiate the positive correlation as worked out in the previous chapter (Zu and Song 2008).

73
CHAPTER FIVE

SUMMARY, RECOMMENDATION AND CONCLUSION

5.0 INTRODUCTIONS:

This chapter revisits in brief what was set to attain as stated before in the chapter one of the

research. Chapter what has been done in the preceding chapters? It creates a good foundation for

the findings and recommendations

DISCUSSION OF THE FINDINGS

Corporate social responsibility impact on nestle UK (Halifax)’s profitability

In chapter 1 and 2 corporate social responsibilities (corporate social responsibility) was defined

by many research in different point of view. the study work was primarily performed to

understand whether nestle UK (Halifax) embarks on corporate social responsibility, whether

corporate social responsibility depict substantial impact on the firm financial performance and

how to understand whether there is challenges experienced by nestle UK (Halifax) in embarking

on corporate social responsibility.In undertaking the research by including primary and

secondary in collecting appropriate information for analysis. From the information collected, it

was raised that as corporate social responsibility of nestle UK (Halifax) grows, there was an

equivalent growth in profits for nestle UK (Halifax).

Corporate social responsibility in the community

Corporate social responsibility is a conventional practice by nestle UK (Halifax) and the society.

This is supported by the positive feedback received from the questionnaires.

Nestlé’s financial commitment to corporate social responsibility

74
There has been a growth in amount invested on corporate social responsibility (2012-2015) as

well as an equivalent growth in nestles UK (Halifax)’s net profits (2012-2015). There is

substantiated from the questionnaires that corporate social responsibility depict a sportive effect

on the profitability of nestle UK (Halifax). Response depicted that nestle UK (Halifax) is in a

position to realize more benefits like the large customer base, customer confidence, better

corporate image as well as other attributable advantages other than profits.

Other benefits nestle derives from corporate social responsibility - value creation

For the study, it can be realized that corporate social responsibility program embarked by nestle

UK (Halifax) has led to value creation for nestle UK (Halifax) as stakeholders and customers are

contented in doing business with the company. Furthermore, the stakeholders business as

improved significantly and as results leading to enhanced customer loyalty. this was due to on

main development that nestle UK (Halifax) attained which made it more competitive and the

favorite fast moving consumer goods company in UK.

Does nestle embark on corporate social responsibility? - Customer unawareness of

corporate social responsibility programs

The research found that the as much as nestle UK is invest a lot in the community involvement

program, the customers or the society are not aware of such programs. This is due to the fact that

nestle UK (Halifax) did insufficient to communicate to the society on the programs planned to

make life much better for the community.

5.2 conclusion

75
The notion of corporate social responsibility as turn out to be more and frequent in business

practices as well as customers in the current era expected firms to be communally accountable.

As much as corporate social responsibility is significant to the company, it has in the past not

been very rewarding method for them to engage in these activities. The business of the 21 st

century has no other options other than to execute and report the corporate social responsibility

in their annual reports. Corporate social responsibility procedure commands high level

administration vision as well as support and in at entire levels of the company. Corporate social

responsibility does not provide instant outcome. The similar corporate social responsibility

initiatives well not effective for every company (Patrick, 1998).

Designing corporate social responsibility initiatives commands ispowerful planning and

execution methodology. Corporate companies must adapt the inventive corporate social

responsibility plan into diverse marketing strategy plan to create as well as sustained a

competitive advantage. Corporate social responsibility depicts a substantial impact on the

company financial performance, and it depicts a positive impact entailing the good business

associations, goodwill among other benefits. In current competitive market, corporate social

responsibility provides a chance for firms to explore other areas of enhancing profitability.

customers have turn to be very urbane and very much cautious of their environment against the

attitude that companies make more profits, its turns to be authoritative for these companies to

put back into the community through corporate social responsibility plans. As much as the

advantages from corporate social responsibility are more over a long period of time, it is such

that it provides a lot more substantial benefits to the company (Kennedy, 2006).

The benefit entails the customer faithfulness, brand image, enhanced corporate image, market

portion as well as social presence.Unfortunately, all the benefits listed above cannot be

76
substantiated in monetary terms but translate to enhancing the profits for the company as times

goes by. Corporate social responsibility is a capital investment and command broad program

backed by management support to roll out numerous corporate social responsibility programs.

Sums enterprise is not in a position to get involved in such an investment because of factors that

is currently indicted in the research such as the long term return on investment. As to whether

corporate social responsibilities can be a corporate plan for companies to attain its objective in

terms of competitive advantage in the market, its market share is another research that may be

studied further (Krosinsky, Robins, and Viederman, 2012).

Corporate social responsibility is current the hot study fields for the academe worldwide and for

the reason of this dissertation is to study the association between corporate social responsibility

and financial performance of Nestle UK company. it was apparent that association between the

corporate social responsibility of their workers as well as financial performance depict a strong

correlation which might be because of the concept of social responsibilities to workers being

broadly accepted by Nestle UK as well as the execution of social accountability indeed led to

workers motivations leading to improved productivity and profits to the company. The overall

implication is that, corporate social responsibility investment can only be effective and

achievable to the company where the stakeholders, the customers, the community and the society

are fully involved in business operations within their respective authority. Executives of

multinational corporations have realized that need that the environment in which they do

business be provided for since their intermediary as well as macro environment depict direct

impact on achievement of company’s objectives as well as its mission statement (Watts, 2001).

The aim of all profit making companies, as well as even non-profit making organization, is to

maximize profits as well as minimize cost by way of optimal usage of existing resources to attain

77
the greatest outcome they are in capacity of. Profitability is a significant factor to entire the

government overseas the overall corporate governance of the company as published in the annual

report to ensure that the needs of the community and of the workers are fully met with the

company. this is implies therefore for that, a company to survive in the current economy,

investment in corporate social responsibility shall be mandatory since, many factors are

currently contributing to the need of corporate governance disclosures by companies across the

globe. For instance, the impact of climate change has led to the need for green accounting, safety

of the environment as well as reduction of waste emission (Ronald, 2014).

.To achieve this, the company act and new accounting standards mandate companies to include

its comprehensive governance report into their annual report to be made public to the users of the

annual reports. This leads to the question of “: is corporate social responsibility be appraised in

monetary terms nowadays? The question is yes since; corporate social responsibility nowadays

has been experienced huge capital investment due to strict rules on accounting standards as well

the changed attitude of customers who currently perceive corporate social responsibility as their

right to green environment and social amenities (Hacioglu, 2013).

many respondent were not well informed about the company corporate social responsibility

programs that is being initiated in the community which would mean that either the community

are not well informed due to poor communication form the company or the company has made

little effort to engage the community in corporate social responsibility objectives. This depict

some problems that nestle limited need to undertake in the future in order identify the reason for

miscommunication or misunderstanding of the company corporate social responsibility project

by the community. This will lead to improved communication between the company and the

community as far as corporate social responsibility is concerned which in turn would develop

78
some positive assertion between the company and the community that is enabling for business

operations (Watts, 2001).

Nestle limited is invest heavily on corporate social responsibility initiatives each financial

period and for that reasons, the company should communicate with the revenue authority in

order to invest in community development are be excused from taxation. The benefit would be to

the community in terms of improved living standards, and health facilities and to the company in

terms of tax exemption. The revenue authority will as well benefit from the corporate social

responsibility initiative by the company since; there will be improved tax compliance by the

company making administration of tax very effective and cooperative. In this regards, tax

exemption would majorly benefit the company subsequently, there shall be little to be taxed from

its profits which would mean that investment in corporate social responsibility would improve

the financial performance of the company (Peil, 2009).

Many workers of nestle considered the company as a safe working environment. This is due to

company investment in safety standards, safety awareness as well as education of its workers on

the need to have safety at all the times. This leads to motivation at place of work hence making

nestle a safer place to work. There is a strong correlation between the workers motivation and

productivity which is notable in nestle UK. Corporate social responsibility does not necessary

mean investment in the community but as well as investment in the staffs of the working in

ensuring that their personal needs is met each day. The correlation between the workers

motivation and financial performance in terms of profitability is strong which would lead to

improved financial performance of the company. It is evident from the responds from

questionnaires that nestle UK is satisfying both the workers of the company and community as

far as corporate social responsibility is concerned(Zu and Song 2008).

79
This is the secret why nestle UK is performing well in terms of profitability each financial

periods as depicted in their annual reports for 2012-2015.Corporate social responsibility

activities as a different strategy to produce products and services would create a new demand.

businesses who implement differentiation strategy frequently seek after numerous means of

differentiation for instance, ben and jerry's, which distinguishes its items by making

extraordinary flavors, utilizing high quality ingredients, supporting the whole society, and

advancing assorted qualities in the working environment. Corporate social responsibility may

be a noticeable method for accomplishing differentiation in line with it allow managers to

improve satisfaction and to accomplish differentiate products and services. It can there for be

concluded that there is strong correlation between corporate social responsibility and firm

financial performance has depicted with the case study of nestle UK (Crane, 2008).

When businesses engage in social and environmental actions, it suffers additional expenses as

well as decreases the incomes of the businesses. Hence, according to this theory, the higher a

corporation’s engagedin corporate social responsibility level, the lower the level of profitability,

accordingly, increasing the involvement of corporations in social actions could growth the

aggregate resources consumed by the business, and, as a result, decreases the earnings of the

business. Thus, this positions the business in a damaging situation compared to a business which

is not involved in corporate social responsibility activities(Aras and Crowther, 2008).Thus,

corporate social responsibility has an undesirable effect on CFP. the implication is that

investment in corporate social responsibility would lead to improved firm financial performance

since, good communication and understanding between the company and the community would

ensure that there is an enabling environment for Nestle UK to do its business and also the

government will have no interference with the operation of the company has far has corporate

80
governance and disclose in its annual reports is concerned. it is as well as eminent that the

comprehensive corporate governance report for nestle UK is attached in the annual report which

show what the company is doing in terms of corporate responsibilities as well as what it intends

to do in the next financial period(Menguc, 2006).

5.3 Recommendation

the part provide alternatives measures to be taken into consideration by the academe, the

company as well as the stakeholders and customers as far as corporate social responsibilities is

concerned. Corporate social responsibility commands greater focus as well as more dedication

from companies since it provides assurance on benefits that the company will realize other the

profits. this provides a chance to the corporate world to explore more areas that is deem viable

for the business success in terms of profitability companies are in a position to gain with time

some leverage other than the product and services being provided to the community. The

multinational corporations undertake corporate social responsibility in order to meet their

financial objectives, social as well as environmental accountabilities. At its core, it’s just about

having a set of values as well as attitude that reinforce its daily activities, accountabilities, the

need for fair transaction, consideration for the society, its behavior on customer’s services as well

as its association with the community. in this regards, the environmental aspect of corporate

social responsibility is depicted as the responsibility to cover the environmental consequences of

the company’s business operations, products and facility, getting rid of waste and emission,

capitalizing on effectiveness and productivity of its resources, reward for externalities and tom

reduce dishonesty practices that may unfavorably affect the pleasure of the nation’s resources by

future generation. in the developing worldwide economy, in which the internet, the news media

81
as well as the information uprising shed light on business practice globally, corporations are

often adjudicated based on the their environmental stewardship .The company appreciates that it

has numerous shareholders.

The business growth and diversification commands the consideration of the board of shareholder

since it is significant. The business ability to communicate with its shareholders and stakeholders

and establishing the materiality of the company effect is significant to business success.

Shareholders participation and communication is important since, their engagement with nestle

will aid in appraising the important issue as well as shape the criticism with the interest of the

community. The participation is a sign of company engagement and center towards community

issues as well as changes that thus create trust between the stakeholders and the community.

Associates in business as well as consumers need to understand what is within the company. This

accountability of business practice implies that for multinational corporations, corporate social

responsibility is no longer an indulgence but necessities. According to Mazurkiewicz (2004),

there is no single meaning of corporate social responsibilities. Based on the viewpoint,

corporate social responsibility entails projects need to be well planned and executed to have least

impact. This may improve the standards of the recipients. From the survey done, it can be

depicted that some customers or individual of the society are not knowing of some corporate

social responsibility projects that’s being undertaken by nestle UK (Halifax).

82
Reference list

Abrantes Ferreira, D., Gonçalves Avila, M. and Dias de Faria, M. (2010) ‘Corporate Social

Responsibility and Consumers’ Perception of Price’, Social Responsibility Journal, 6 (2),

pp. 208-221.

Angelidis J. P., Massetti, B. L. & Magee-Egan, P. (2008). Does Corporate Social Responsibility

Orientation Vary by Position in the Organizational Hierarchy?.Review of Business Spring,

28(3), 23-32.

Argandoña, A. (1998). The Stakeholder Theory and the Common Good.Journal of Business

Ethics, 17, 1093-1102.

Argandoña, I. (2008) 'The Stakeholder Theory and the Common Good', Business Ethics, vol. 17,

pp. 1093-1102.

Aupperle, K., Carroll, A. and Hartfield, J. (1985), “An empirical examination of the relationship

between corporate social responsibility and profitability”, Academy of Management

Journal, Vol. 28 No. 2, pp. 446-63.

Balabanis, G., Philips, H. &Lyall, J. (1998). Corporate Social Responsibility and Economic

Performance in the Top British Companies: Are they Related? European Business

Review, 98(1), 25-44.

Barney, J. B. 2002. Gaining and sustaining competitive advantage (2nd ed.). Upper Saddle River,

NJ: Prentice-Hall.

Beurden, P. and Gossling, T. (2008), “The worth of values – a literature review on the relation

between corporate social and financial performance”, Journal of Business Ethics, Vol. 82,

pp. 407-24.

83
Bhattachary, C., Korschun, D. and Sen, S. (2011) What Really Drives Value In Corporate

Responsibility?.

Birch, D. (2008) 'Ten Principles Of Corporate Citizenship'. Social Responsibility Journal 4 (1/2),

129-135

Bourke, P. (1989). Concentration and other determinants of bank profitability in Europe, North

America and Australia.Journal of Banking and Finance 13, 65-79.

Bourke, P. (1998) ' Concentration and other determinants of bank profitability ', Journal of

Banking and Finance, vol. 13, pp. 65-79.

Bowen, H. R. (1953). Social Responsibilities of the Businessman. New York: Harper & Row.

Bowman, E. &Haire, M. (1975).A Strategic Posture toward Corporate Social

Responsibility.California Management Review, 18(2), 49-58.

Branch, B. (1983).Misleading Accounting: The Danger and the Potential.Working

paper.Amherst, USA: University of Massachusetts.

Bridget, S. (2005) Action Research: A Methodology For Change And Development:, London:

Springer.

Carroll Siu, .C. (2013) Doing a Research Project in Nursing and Midwifery: A Basic Guid,

Sydney: Springer.

Carroll, A. (1991) "The Pyramid Of Corporate Social Responsibility: Toward The Moral
Management Of Organizational Stakeholders". Business Horizons 34 (4), 39-48

Carroll, A. (2014) Business and Society: Ethics, Sustainability, and Stakeholder, New York:

Cingage Learning.

84
Carroll, A. B. (1979). A Three Dimensional Conceptual Model of Corporate Social

Performance.Academ

Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral

management of organizational stakeholders. Business Horizons, 39–48.

Carroll, A. B. (1999). Corporate Social Responsibility: Evolution of a Definitional Construct.

Business & Society, 38(3), 268-295.

Carroll, C.E. (2015) The Handbook of Communication and Corporate Reputation, Sydney :

Springer.

Chen, L. (2015) Sustainability and company performance, New York: John Wiley & Son's.

Clarkson, M. B. E. (1995). A stakeholder framework for analyzing and evaluating corporate

social performance.Academy of Management Review, 92, 105-108.

Coase, R. H. (1960). The problem of social cost.Chicago, Ill: University of Chicago Law School.

Coase, R. H. (1988). The firm, the market, and the law (pp. 95-156).Chicago: University of

Chicago Press.

Cochran, R. and Wood, R. (1984), “Corporate social responsibility and financial performance”,

Academy of Management Journal, Vol. 27 No. 1, pp. 42-56

Collis, J. and Hussey, R. (2009) Business Research: A Practical Guide For Undergraduate &
Postgraduate Students. 3rd edn. United Kingdom: Hampshire

Cornell, B. & Shapiro, A. C. (1987).Corporate Stakeholders and Corporate Finance.Financial

Management 16, 5-14.

Cornell, B. and Shapiro, A.C. (1987), “Corporate stakeholders and corporate finance”, Financial

Management, Vol. 16 No. 1, pp. 5-14.

85
Crane, A. (2008) The Oxford Handbook of Corporate Social Responsibility, New York: John

Wiley & Son's.

Deegan, C. and Rankin, M. (1997) "The Materiality Of Environmental Information To Users Of

Annual Reports". Accounting, Auditing & Accountability Journal 10 (4), 562-583

Demmerling, T. (2014) Corporate Social Responsibility Overload:

Destri, M.L. (2014) Managerial irresponsibility and firm survival. Pivoting the company, New

York: Cingage Learning.

Diamond, D. W. &Dybvig, P. H. (1983).Bank Runs, Deposit Insurance and Liquidity. Journal of

Political Economy 91, 401–419.

Erhemjamts, O., Li, Q. and Venkateswaran, A. (2012) "Corporate Social Responsibility And Its

Impact On Firms’ Investment Policy, Organizational Structure, And Performance". J Bus

Ethics 118 (2), 395-412

Filho, .L. (2008) Global Practices of Corporate Social Responsibility, New York: John Wiley &

Son's.

Freeman, E. (2010) Stakeholder Theory: The State of the Art, London: Cingage Learning.

Freeman, R. (1984). Strategic management: A stakeholder perspective. Englewood Cliffs, NJ:

Prentice-Hall.

Friedman, M 1970, „The Social Responsibility of Business is to Increase its Profits‟, New York

Times Magazine, September 13th, pp. 32–33, 122, 126.

Frooman, J.: 1997, ‘Socially Irresponsible and Illegal Behavior and Shareholder Wealth’,

Business and Society 36(3), 221–249.

86
Geoffrey R. Marczyk, .D..F. (2010) Essentials of Research Design and Methodology

Gossling, T., &Vocht, C. (2007).Social role conceptions and CSR policy success. Journal of

Business Ethics, 47(4), 363–372

Grazia Calabrò, .D..L. (2012) Moving from the crisis to sustainability, New York: Cingage

Learning.

Griffin, J. J. and J. F. Mahon: 1997, ‘The Corporate Social Performance and Corporate Financial

Performance Debate’, Business & Society 36(1), 5–31.

Aras, G. and Crowther, D. (2008) culture and corporate governance. Leicester: social

responsibility Research network.

Guliani, L.K. (2016) Corporate Social Responsibility in the Hospitality and Tourism, New York:

John Wiley & Son's.

Gupta, S. (2011) "Consumer Stakeholder View Of Corporate Social Responsibility: A

Comparative Analysis From USA And India". Social Responsibility Journal 7 (3), 363-

380

Hacioglu, Ü. (2013) Managerial Issues in Finance and Banking: A Strategic Approach, London:

Cingage Learning.

Haire, B. (2005) 'A Strategic Posture toward Corporate Social Responsibilit', California

Management Review, vol. 18, pp. 48-58.

Heald, M 1957, „Management‟s responsibility to society: The growth of an idea‟, The Business

History Review, vol. 31, no. 4, pp. 375-384

Henry, A. (2011) Understanding Strategic Management, London: Cingage Learning.

87
Hillman, A. and Keim, G. (2001) "Shareholder Value, Stakeholder Management, And Social

Issues: What's The Bottom Line?".Strat. Mgmt. J. 22 (2), 125-139

Hopkins, M 1998 The Planetary Bargain: Corporate Social Responsibility Comes of Age,

Macmillan, London

Hopkins, M.(2007):Corporate Social Responsibility & International Development: Is Business

the Solution?,Earthscan, London

Idowu, S. (2008) Key Initiatives In corporate social Responsibility, New York: John Wiley &

Son's.

Income Statement For Nestle SA ADR (NSRGY) From Morningstar.Com [online] available at:

http://financials.morningstar.com/incomestatement/is.html?t=NSRGY&region=usa&culture=en-

US> [Accessed 14 April 2016]

Inoue, Y. and Lee, S. (2011) "Effects Of Different Dimensions Of Corporate Social

Responsibility On Corporate Financial Performance In Tourism-Related Industries".

Tourism Management 32 (4), 790-804

Ittner, C. D. and D. F. Larcker: 1998, ‘Innovations in Performance Measurement: Trends and

Research Implications’, Journal of Management Accounting Research 10(1), 205–238

Juholin, E.: 2004, ‘For Business or the Good of All? A Finnish Approach to Corporate Social

Responsibility’, Corporate Governance 4(3), 20–31.

Kaplan, R. S. and D. P. Norton: 2001, ‘Transforming the Balanced Scorecard from Performance

Measurement to Strategic Management: Part 1’, Accounting Horizon 15(1), 87–104.

Krosinsky, C., Robins, N. and Viederman, S. (2012) Evolutions in sustainable investing:

Strategies, funds and thought leadership. United Kingdom: Wiley, John & Sons
88
Lai, C. S., Chiu, C. J., Yang, C. F., &Pai, D. C. (2010). The effects of corporate social

responsibility on brand performance: The mediating effect of industrial band equity and

corporate reputation. Journal of Business Ethics, 95(3), 457–469

Lye, L.H. (2010) Sustainability Matters: Environmental Management in Asia, New York: John

Wiley & Son's.

Mackey, A., Mackey, T. and Barney, J. (2007) "CORPORATE SOCIAL RESPONSIBILITY

AND FIRM PERFORMANCE: INVESTOR PREFERENCES AND CORPORATE

STRATEGIES.". Academy of Management Review 32 (3), 817-835

Maignan, I., Ferrell, O. and Ferrell, L. (2005) "A Stakeholder Model For Implementing Social

Responsibility In Marketing". European Journal of Marketing 39 (9/10), 956-977

Management, 17, 99 – 120.

Marc J. Epstein, .R.B. (2014) Making Sustainability Work, New York: John Wiley & Son's.

Maria-Alejandra Gonzalez-Perez, .L. (2012) The UN Global Compact: Fair Competition and

Environmental, London: Cingage Learning.

Marin, L., Ruiz, S. and Rubio, A. (2008) ‘The Role of Identity Salience in the Effects of

Corporate Social Responsibility on Consumer Behaviour’, Journal of Business Ethics, 84

(1), pp. 65-78.

Marks, R.G. (1982) Designing a research project: the basics of biomedical research, London:

Springer.

McWilliams, A. and Siegel, D. (2001) "CORPORATE SOCIAL RESPONSIBILITY: A

THEORY OF THE FIRM PERSPECTIVE.". Academy of Management Review 26 (1),

117-127

89
Mel, G. (2004) 'Corporate Social Responsibility Theories: Mapping the Territory', Journal of

Business Ethics, vol. 53, pp. 51-71.

Menguc, N. (2006) 'Corporate Responsibility, Stakeholders and', European Journal of marketing

, vol. 39, pp. 1184-1198.

Mermod, A.Y. (2008) Corporate social Responsibility in the Global Businness World, New York:

Cingage Learning.

Mishra, S. and Suar, D. (2010) "Does Corporate Social Responsibility Influence Firm

Performance Of Indian Companies?". J Bus Ethics 95 (4), 571-601

Mohr, L., Webb, D. and Harris, K. (2001) ‘Do Consumers Expect Companies to Be Socially

Responsible’?, The Impact of Corporate Social Responsibility on Buying Behaviour',

Journal of Consumer Affairs, 35 (1), pp. 45-72.

Moore, G. (2001), “Corporate social and financial performance: an investigation in the UK

supermarket industry”, Journal of Business Ethics, Vol. 34 Nos 3/4, pp. 299-316.

Moskowitz, M. (1972).Choosing socially responsible stocks. Business and Society Review, 1,

71–75

Nelling, E. and Webb, E. (2009), “Corporate social responsibility and financial performance: the

‘virtuous circle’ revisited”, Review of Quantitative Finance and Accounting, Vol. 32, pp.

197-209.

Orlitzky M., Schmidt, F. L., &Rynes S. 2003. Corporate social and financial performance: A

meta-analysis. Organization Studies, 24: 403– 411.

Philip Kotler, .M..L. (2016) A Stakeholder Approach to Corporate Social Responsibility,

London: John Wiley & Son's.

90
Porter, M., & Kramer, M. (2002).The competitive advantage of corporate philanthropy. Harvard

Business Review, 80(12), 57–68.

Reed, F. (2003) 'Stockholders and stakeholders: A new perspective on corporate governance',

California Management Review, vol. 25, pp. 93-94.

Regine Barth, .W. (2009) Corporate Social Responsibility in Europe, London: John Wiley &

Son's.

Rettab, B., Brik, A. and Mellahi, K. (2008) "A Study Of Management Perceptions Of The Impact

Of Corporate Social Responsibility On Organisational Performance In Emerging

Economies: The Case Of Dubai". J Bus Ethics 89 (3), 371-390

Ronald Paul Hill, .L. (2014) Handbook of Research on Marketing, New York: John Wiley &

Son's.

Ros, s. (2008) 'The Economic Theory of Agency: The Principal’s Problems', American Economic

Review, vol. 67, p. 139.

Rühmkorf, A. (2015) Corporate Social Responsibility, Private Law and Global Supply, London:

Cingage Learning.

Sabri Boubaker, .K.N. (2014)Corporate Governance and Corporate Social Responsibility,

London: John Wiley & Son's.

Saeidi, S., Sofian, S., Saeidi, P., Saeidi, S. and Saaeidi, S. (2015) "How Does Corporate Social

Responsibility Contribute To Firm Financial Performance? The Mediating Role Of

Competitive Advantage, Reputation, And Customer Satisfaction". Journal of Business

Research 68 (2), 341-350

91
Salazar, J., & Husted, B. (2008). Principals and agents: Future thoughts and the friedmanite

critique of corporate social responsibility. In A. Crane, A. McWilliams, D. Matten, J.

Moon, & D. Siegel (Eds.), The Oxford handbook of corporate social responsibility pp.

137–155

Saleh, M., Zulkifli, N. and Muhamad, R. (2011) "Looking For Evidence Of The Relationship

Between Corporate Social Responsibility And Corporate Financial Performance In An

Emerging Market". Asia-Pacific Journal of Business Administration 3 (2), 165-190

Salzmann, O., Somers, A. and Steger, U. (2005), “The business case for corporate sustainability:

literature review and research options”, European Management Journal, Vol. 23 No. 1,pp.

27-36.

Samuel O. Idowu, .L.F. (2009) Professionals Perspectives of Corporate Social Responsibility,

London: Cingage Learning.

Sarantakos, S. (2005) Social research. New York: Palgrave Macmillan.

Schreck, P. (2009) The Business Case for Corporate Social Responsibility:, New York: Cingage

Learning.

Siegel, M. (2001) Corporate social responsibility, New York: Cingage Learning.

Simpson, W.G. and Kohers, T. (2002), “The link between corporate social and financial

performance: evidence from the banking industry”, Journal of Business Ethics, Vol. 35,

pp. 97-109.

92
Snieder, R &Larner, K. (2009), The Art of Being a Scientist: A Guide for Graduate Students and
their Mentors, Cambridge University Press

SpenceEditorial:, M. (Business Ethics) 'Responsibility and Small Business', Journal of , vol. 67,

pp. 219-226.

Stanwick, S. and Stanwick, P. (2000) "The Relationship Between Environmental Disclosures

And Financial Performance: An Empirical Study Of US Firms". Eco‐Management and

Auditing 7 (4),pp. 155-164

Steger, U., Somers, A. and Salzmann, O. (2007), “The economic foundations of corporate

sustainability”, Corporate Governance, Vol. 7 No. 2, pp. 162-77.

Sun, L. (2012) "Further Evidence On The Association Between Corporate Social Responsibility

And Financial Performance". International Journal of Law and Management 54 (6),pp.

472-484

Torres, A., Bijmolt, T., Tribó, J. and Verhoef, P. (2012) "Generating Global Brand Equity

Through Corporate Social Responsibility To Key Stakeholders". International Journal of

Research in Marketing 29 (1),pp. 13-24

Vance, S.C. (1975), “Are socially responsible corporations good investment risk?”, Management

Review, Vol. 64 No. 8, pp. 18-24.

Vermeulen, F. and Barkema, H. (2002) "Pace, Rhythm, And Scope: Process Dependence In

Building A Profitable Multinational Corporation". Strat. Mgmt. J. 23 (7), 637-653

Vidaver-CohenAltman (2008) 'Corporate Citizenship in the New', Millennium. Business and

Society Review, vol. 105, pp. 145-169.

Waddock, S.A. and Graves, S.B. (1997), “The corporate social performance-financial

performance link”, Strategic Management Journal, Vol. 18, pp. 303-19.


93
Watts, H. (2001) 'Corporate social responsibility: Making good business', World Business

Council for Sustainable.

Weber, E. (2008) A short history of derivative security markets. Crawley, New York: Cimngage

Learning.

Weber, M. (2008) "The Business Case For Corporate Social Responsibility: A Company-Level

Measurement Approach For CSR". European Management Journal 26 (4), pp. 247-261

Weber, O., Diaz, M. and Schwegler, R. (2012) "Corporate Social Responsibility Of The Financial

Sector - Strengths, Weaknesses And The Impact On Sustainable Development".

Sustainable Development 22 (5), PP. 321-335 Journalof Management Review, 4, pp. 497–

505.

Weygandt, J. (2009) Managerial Accounting: Tools for Business Decision Making, London: Jonh

Wiley.

Yoon, Y., Gürhan-Canli, Z. and Schwarz, N. (2006) "The Effect Of Corporate Social

Responsibility (CSR) Activities On Companies With Bad Reputations". Journal of

Consumer Psychology 16 (4), pp.377-390

Zhao, J. (2014) Corporate Social Responsibility in Contemporary China, New York: John Wiley

& Son's.

Zu, L. and Song, L. (2008) "Determinants Of Managerial Values On Corporate Social

Responsibility: Evidence From China". J Bus Ethics 88 (S1),pp. 105-117

94
-

Appendices:

QUESTIONNAIRE FOR STAFF OF NESTLE UK (Halifax)

SECTION A:

INSTRUCTION: Please tick (√) the correct answers from the options provided below.

1. Sex: Male ( ) Female ( )

2. Age 16-25( ) 26-35( ) 36-45( ) 45 and above ( )

3. Status/Position: Low level Manager ( ) Middle level Manager ( ) High level Manager ( )

4. How long have you been you been in Nestlé UK? Less than a 7 years ( ) More than 7 years ( )

5. What is you highest level of education?

 Educational Qualifications: SSCE ( ) HND( ) B.sc( ) BA( ) MBA/M.sc( ) Others(

 Professional Qualifications: CIM( ) ACCA( ) Others ( )

SECTION B:

INSTRUCTION: Please tick (√) the correct answers from the options provided below.

6. What do you think about Nestlé embarking on CSR?

Necessary ( ) Compulsory ( ) Voluntary ( ) Beneficial ( )

7. Is there any impact of Nestle UK investment ion CSR on the community?

95
Positive Impact ( ) Negative Impact ( ) Neutral ( )

8. Do Nestle UK take advantage CSR investment other than profit creations?

Large Customer Base ( ) Customer Confidence ( )

Good corporate Image ( ) Other Benefits ( )

SECTION C:

INSTRUCTION: Please tick (√) the correct answers from the options provided below.

In the given section SA- Strongly Agree; Agree- A; U- Undecided; D- Disagree; SD- Strongly

Disagree SA 5

SA A U D
1 4 3 2
9 The growth in profit is attributed by

investment in CSR of Nestle (UK)


10 The decline in profits is due to Nestle

(UK) investment in CSR Activities.


11 Corporate Social Responsibility has no

substantial effect on profitability of

Nestle UK.
12 Corporate Social Responsibility has a

substantial effect on profitability of

Nestle UK
13 Corporate Social Responsibility by

Nestle UK provides assurance on

customer's confidence

96
QUESTIONNAIRE FOR STAKEHOLDERS OF NESTLE UK

Dear Sir/Madam,

The Aim of this questionnaire is to collect data Value Creation through corporate Social

Responsibility in Multinational companies and its impacts on firm financial performance. It is

focused at undertaking for academic research purposes. Kindly compete the questionnaire as

honest and keenly as you can and be guaranteed that any information provided shall be held

confidential only for research purposes.

QUESTIONNAIRE FOR NESTLE UK STAKEHOLDERS

Section A:

INSTRUCTION: Please tick (√) the correct answers from the options provided below.

1. Sex Male ( ) Female ( )

2. How long have you been with Nestlé UK?

Less than 7 years ( ) More than 7 years ( )

3. What is the volume of transaction you’ve had with Nestle UK?

High ( ) Medium ( ) low ( )

SECTION B:

INSTRUCTION: Please tick (√) the correct answers from the options provided below.

4. Which of these other Multinational corporations do you partner with? Unilever ( ) Cadbury

UK ( ) PZ Cussons UK ( ) Other MNC ( )

5. Are you cognizant that Nestlé UK has embarked on any CSR project?

Yes ( ) No ( ) Undecided ( )

6. What impact of the CSR projects on the community?

Positive Impact ( ) Negative Impact ( ) Neutral ( )


97
7. Are there other advantage that Nestle UK will attain other than profitability when it invests in

CSR project?

Large Customer Base ( ) Customer Confidence ( )

Good corporate Image ( ) Other Benefits (}

SECTION C:

INSTRUCTION: Please tick (√) the correct answers from the options provided below.

In the given section SA- Strongly Agree; Agree- A; U- Undecided; D- Disagree; SD- Strongly

Disagree SA 5

SA A U D
1 4 3 2
8 The growth in profit is attributed by

investment in CSR of Nestle (UK)


9 do corporate social responsibility

depict substantial impact on the

profitability of nestle UK (Halifax)

SECTION A: QUESTIONNA FOR CUSTOMERS

Section A:

INSTRUCTION: Please tick (√) the correct answers from the options provided below.

1. Sex Male ( ) Female ( )

2. What is the advantage of corporate social responsibility?

SECTION B:

INSTRUCTION: Please tick (√) the correct answers from the options provided below.

98
4. 4. Do you use nestle products?

Yes ( ) No ( ) Undecided ( )

5. Will you be buying nestle product?

Yes ( ) No ( ) Undecided ( )

6. Do you understand corporate social responsibility?

Positive Impact ( ) Negative Impact ( ) Neutral ( )

7. Are you aware whether nestle has embarked on corporate social responsibility?

Yes ( ) No ( ) Undecided ( )

99
ABBREVIATIONS

SSCE; Senior Secondary Certificate of Education

HND; Higher National Diploma

B.sc; Bachelor of science

BA; Business Administration

MBA/M.sc; Master’s in Business Administration

CIM; Chartered Institute of Marketing

ACCA; Association of charted certified Accountant

100