CSR in South Europe during the financial crisis and its relation to the financial states of Greek companies

ZIOGAS, IOANNIS and METAXAS, THEODORE (2018): CSR in South Europe during the financial crisis and its relation to the financial states of Greek companies.

Abstract

This paper aims at presenting the notion of corporate social responsibility (CSR) in Europe by examining its application in Southern European countries, Greece, Italy, Spain and Portugal, thus, consisting of the major Mediterranean countries not only in terms of proximity but also sharing common features, were at the center of the financial crisis in Europe in 2009. The aforementioned countries are under examination on the one hand as members of Europe, which is the Mediterranean and on the other hand as independent ones. Additionally, the complexity of CSR is presented, its aspects through time, its diversity depending on the geographical position as well as its methods of evaluation. The longitudinal contrastive analysis is the starting point for further improvement as the countries, except for Portugal, are fluctuating within low levels and the Mediterranean in average ones. Furthermore, the examination of the financial state of the Greek companies within the 2015-2016 period, confirms the majority of the literature that the adoption of CSR’s good practices contributes, even partly, to the development of their effectiveness. As a conclusion, the structure of a commonly acceptable measurement model of the National Social Responsibility and the longitudinal measurement will be a useful tool for all involved institutions, with immediate results to both the society and the companies.

• Item Type: MPRA Paper
• Language: English
• Keywords: CSR, Europe, Mediterranean, Comparative Analysis
• Subjects: M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M14 - Corporate Culture ; Diversity ; Social Responsibility

References

Aaronson, S. and Reeves, J. (2002), The European Response to Public Demands for Global Corporate Responsibility, Washington D.C. USA: National Policy Association.

Aguinis, H. and Glavas, A. (2012), What we know and don’t know about Corporate Social Responsibility: A review and research agenda, Journal of Management, Vol. 18 , No. 4, pp. 932–968.

Albareda, L., Lozano, J. and Ysa, T. (2007), Public policies on corporate social responsibility: The role of governments in Europe, Journal of Business Ethics, Vol. 74, No. 4, pp. 391–407.

Albareda, L., Lozano, J.M., Tencati, A., Midttun, A. and Perrini, F. (2008), The changing role of governments in corporate social responsibility: Drivers and responses, Business Ethics: A European Review, Vol. 17, No. 4, pp. 347–363.

Aras, G., Aybars, A. and Kutlu, O. (2010), Managing corporate performance Investigating the relationship between corporate social responsibility and financial performance in emerging markets, International Journal of Productivity and Performance Management, Vol. 59, No. 3, pp. 229-254.

Argandona, A. and Heidi von Weltzien Hoivik (2009), Corporate Social Responsibility: One Size Does Not Fit All. Collecting Evidence from Europe, Journal of Business Ethics, Vol. 89, pp. 221–234.

Artiach, T., Lee, D., Nelson, D., and Walker, J. (2010), The determinants of corporate sustainability performance, Accounting and Finance, Vol. 50, pp. 31-51.

Aupperle, K., Carroll, A. and Hatfield, J. (1985), An empirical examination of the relationship between corporate social responsibility and profitability, Academy of Management Journal, Vol. 28, No. 2, pp. 446–463.

Backman, J. (1975), Social responsibility and accountability, New York: New York University Press.

Beurden Van, P. and Gössling, T. (2008), The worth of values: A literature review on the relation between corporate social and financial performance, Journal of Business Ethics, Vol. 82, No. 2, pp. 407-424.

Boesso, G., Kumar, K. (2009), Stakeholder prioritization and reporting: evidence from Italy and the US, Account Forum, Vol. 33, No. 2, pp. 162–175.

Bowen, H.R. (1953), Social responsibilities of the businessman, New York: Harper & Row.

Brammer, S., Brooks, C. and Pavelin, S. (2006), “Corporate Social Performance and Stock Returns: UK Evidence from Disaggregate Measures”, Financial Management , Vol. 35, No. 3, pp. 97-116.

Branco, M.C. and Rodrigues, L.L. (2008), Factors Influencing Social Responsibility Disclosure by Portuguese Companies, Journal of Business Ethics, Vol. 83, pp. 685-701.

Campbell, J. L. (2007), Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility, Academy of Management Review, Vol. 32, No.3, pp. 946–967.

Carroll, A.B. (1979), A three-dimensional conceptual model of corporate social performance”, Academy of Management Review, Vol. 4, pp. 497-505.

Carroll, A.B. (1983), Corporate social responsibility: Will industry respond to cutbacks in social program funding?, Vital Speeches of the Day, Vol. 49, pp. 604-608.

Carroll, A.B. (1991), The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders, Business Horizons. Vol. 34, No. 4, pp. 39-48.

Carroll, A.B. (2000), Commentary and an Overview of Key Questions on Corporate Social Performance Measurement, Business Society, Vol. 39, No. 4, pp. 466-478.

Chapple, W. and Moon, J. (2005), Corporate social responsibility in Asia: a seven-country study of CSR website reporting. Business & Society, Vol. 44, No. 4, pp. 415–441.

Charitoudi, G., Giannarakis, G. and Lazarides, Th. (2011), Corporate Social Responsibility performance in periods of financial crisis., European Journal of Scientific Research, Vol. 63, No. 3, pp. 447-455.

Choi, J., Kwak, Y. and Choe, C. (2010) Corporate social responsibility and corporate financial performance: evidence from Korea, Australian Journal of Management , Vol. 35, No. 3, pp. 291-311.

Clarkson, M.E. (1995), A stakeholder framework for analyzing and evaluating corporate social performance, Academy of Management Review, Vol. 20, No. 1, pp. 92-117.

Cochran, P.L. and Wood, R.A. (1984), Corporate social responsibility and financial performance, Academy of Management Journal, Vol. 27, pp. 42-56.

Dahlsrud, A. (2008), How Corporate Social Responsibility is Defined: an Analysis of 37 Definitions, Corporate Social Responsibility and Environmental Management, Vol. 15, No. 1, pp. 1–13.

Davis, K. (1960), Can business afford to ignore social responsibilities?, California Management Review, Vol. 2, pp. 70-76.

Eilbert, H. and Parket, I.R. (1973), The current status of corporate social responsibility, Business Horizons, Vol. 16, pp. 5-14.

Elkington, J. (1997), Cannibals with Forks: Triple Bottom Line of 21st Century Business, Capstone Publishing Limited, Oxford.

Elsayed, K. and Paton, D. (2005), The impact of environmental performance on firm performance: static and dynamic panel data evidence, Structural Change and Economic Dynamics, Vol. 16, No. 3, pp. 395-412.

Esteban, V.A., Villardon, M.P.G. and Sanchez, I.M.G. (2018), A multivariate proposal for national corporate social responsibility practices index (NCSRPI) for international settings, Social Indicators Research, accepted on 3 September 2018.

European Commission (2002), Communication from the Commission concerning Corporate Social Responsibility: A business contribution to Sustainable Development, Brussels.

Falck, O. and Heblich, S. (2007), Corporate social responsibility: Doing well by doing good, Business Horizons, Vo. 50, pp. 247–254.

Fernández, B. and Souto, F. (2009), Crisis and Corporate Social Responsibility: Threat or Opportunity?, International Journal of Economic Sciences and Applied Research, Vol. 1, pp.36-50.

Fombrun, C. and Shanley, M. (1990) What’s in a name? Reputation building and corporate strategy, Academy of Management Journal, Vol. 33, No. 2, pp. 233–258.

Frederick, W.C. (1960), The growing concern over business responsibility, California Management Review, Vol. 2, pp. 54-61.

Freeman, R.E. (1984), Strategic management: A stakeholder approach, Pitman, Boston.

Giannarakis, G. and Theotokas, I. (2011), The effect of financial crisis in corporate social responsibility performance, International Journal of Marketing Studies, Vol.3, No. 1.

Gjølberg, M. (2009), Measuring the immeasurable? Constructing an index of CSR practices and CSR performance in 20 countries, Scandinavian Journal of Management, Vol. 25, pp. 10-22.

Griffin, J.J. and Mahon, J.F. (1997), The Corporate Social Performance and Corporate Financial Performance Debate: Twenty-Five Years of Incomparable Research, Business Society, Vol. 36, No. 1, pp. 5-31.

Habisch, A., Jonker, J., Wegner, M. and Schmidpeter, R. (2005), Corporate social responsibility across Europe, Berlin: Springer.

Heald, M. (1957), Management’s responsibility to society: The growth of an idea, The Business History Review, Vol. 31, No. 4, pp. 375-384.

Hopkins, M. (1998), The Planetary Bargain: Corporate Social Responsibility Comes of Age, London: Macmillan.

Jackson, G. and Apostolakou, A., (2010), Corporate Social Responsibility in Western Europe: An Institutional Mirror or Substitute?, Journal of Business Ethics, Vol. 94, pp. 371–394.

Ji-Ming, L., Hong, Z. and Hao-Bai, W. (2009), An Empirical Study of Corporate Financial Performance and Corporate Social Responsibility: Evidence from the Service Industry of Zhejiang Province, Management and Service Science International Conference, September 20-22 2009.

Karagiorgos, Th. (2010), Corporate Social Responsibility and Financial Performance: An Empirical Analysis on Greek Companies, European Research Studies, Vol 13, No. 4.

Karaibrahimoglu, Y.Z. (2010), Corporate social responsibility in times of financial Crisis. African Journal of Business Management, Vol. 4, No. 4, pp. 382-389.

Khoury G., Rostami, J. and Turnbull J.P. (1999), Corporate Social Responsibility: Turning Words into Action, Conference Board of Canada, Ottawa.

Kok, P., Van der Wiele, T., McKenna, R. and Brown, A. (2001), A Corporate Social Responsibility Audit within a Quality Management Framework, Journal of Business Ethics, Vol. 31, pp. 285-297.

Kolk, A. (2008), Sustainability, accountability and corporate governance: Exploring multinationals reporting practices, Business Strategy and the Environment, Vol. 17, pp. 1–15.

Kourula, A. (2010), Corporate engagement with non-governmental organizations in different institutional contexts – a case study of a forest products company, Journal of World Business, Vol. 45, No. 4, pp. 395–404.

Lee, D.D., Faff, R.W. and Langfield-Smith, K. (2009), Revisiting the Vexing Question: Does Superior Corporate Social Performance Lead to Improved Financial Performance?, Australian Journal of Management , Vol. 34, No. 1, pp. 21-49.

Lins, K.V., Servaes, H. and Tamayo, A. (2017), Social Capital, Trust, and Firm Performance:The Value of Corporate Social Responsibilityduring the Financial Crisis, The Journal of Finance, Vol. 72, No.4.

López, M.V., Garcia, A. and Rodriguez, L. (2007), Sustainable development and corporate performance: A study based on the Dow Jones Sustainability Index, Journal of Business Ethics, Vol. 75, pp. 285-300.

Maignan, I. and Ralston, D.A. (2002), Corporate social responsibility in Europe and the US: insights from businesses’ self-representations, Journal of International Business Studies , Vol. 33, No. 3, pp. 497–514

Maon, F., Swain, V. and Lindgreen, A. (2017), One Vision, Different Paths: An Investigation of Corporate Social Responsibility Initiatives in Europe, Journal of Business Ethics, Vol 143, No. 2, pp. 405–422.

Margolis, J.D. and Walsh, J.P., (2003), Misery Loves Companies: Rethinking Social Initiatives by Business, Administrative Science Quarterly, Vol 48, No. 2, pp. 268-305.

Matten, D. and Moon, J. (2004), Implicit and explicit CSR. A conceptual framework to understand CSR in Europe, ICCSR Research Paper Series, Vol. 29.

McWilliams, A. and Siegel, D. (2000), Corporate social responsibility and financial performance: Correlation or misspecification?, Strategic Management Journal, Vol. 21, No. 5, pp. 603–609.

Melé, D. (2008), “Corporate Social Responsibility Theories”, in Crane A., McWilliams A., Matten D., Moon J., and Siegel D.(ed.), The Oxford Handbook of Corporate Social Responsibility, Oxford University Press, Oxford, pp. 47-82.

Mercedes, R.F. (2016), Social respondibility and financial performance: the role of good corporate governance, Business Research Quarterly, Vol. 19, pp. 137-151.

Metaxas, T. and Tsavdaridou, M. (2013), Corporate social responsibility in Greece during the crisis period, Journal of Advanced Research in Management, Vol. 7, No. 1, pp. 20–34.

Metaxas, T. (2016), Corporate social responsibility in European organizations: A universal idea? MPRA, Paper No. 71104.

Midttun, A., Gautesen, K. and Gjølberg, M. (2006), The political economy of CSR in Western Europe, Corporate Governance: The international journal of business in society, Vol. 6, No. 4, pp. 369-385.

Mittal, K.R., Sinha, N. and Singh, N. (2008), Current research development: An analysis of linkage between economic value added and corporate social responsibility, Management Decision, Vol. 46, No. 9, pp. 1437-1443.

Moon, J. (2014), Corporate Social Responsibility: A Very Short Introduction, Oxford University Press, Oxford, UK.

Nelling, E. and Webb, E. (2009), Corporate social responsibility and financial performance: the ‘‘virtuous circle’’ revisited, Review of Quantitative Finance and Accounting, Vol. 32, No. 2, pp. 197-209.

Rahman, S. (2011), Evaluation of Definitions: Ten Dimensions of Corporate Social Responsibility, World Review of Business Research, Vol. 1, No. 1, pp. 166 – 176.

Rettab, B., Ben Brik, A. and Mellahi, K. (2009), A Study of Management Perceptions of the Impact of Corporate Social Responsibility on Organisational Performance in Emerging Economies: The Case of Dubai, Journal of Business Ethics, Vol. 89, No. 3, pp. 371-390.

Rossouw, G. J. (2011), A Global Comparative Analysis of the Global Survey of Business Ethics, Journal Business Ethics, Vol. 104, pp. 93–101.

Sethi, S.P. (1975), Dimensions of corporate social performance: An analytic framework, California Management Review, Vol. 17, pp. 58-64.

Sirgy, M.J. (2002), Measuring Corporate Performance by Building on the Stakeholders Model of Business Ethics, Journal of Business Ethics, Vol. 35, pp. 143-162.

Skouloudis, A., Isaac, D. and Evaggelinos, K. (2016), Revisiting the national corporate social responsibility index, International Journal of Sustainable Development and World Ecology, Vol. 23, No. 1, pp.61-70.

Snedecor, G.W. and Cochran, W.G. (1989), Statistical Methods, Eighth Edition, Iowa State University Press.

Soana, M.G. (2011), The relationship between corporate social performance and corporate financial performance in the banking sector, Journal of business Ethics, Vol. 104, No, 1, pp. 133-148.

Strand, R. (1983), A systems paradigm of organizational adaptations to the social environment, Academy of Management Review, Vol. 8, pp. 90-96.

Teoh, S.H, Welch, I. and Wazzan, C.P. (1999), The effect of socially activist investment policies on the financial markets: evidence from the South African boycott, Journal of Business, Vol. 72, No. 1, pp. 35–89.

Ullmann, A. (1985), Data in Search of a Theory: A Critical Examination of the Relationships among Social Performance, Social Disclosure, and Economic Performance of U. S. Firms, The Academy of Management Review, Vol. 10, No. 3, pp. 540- 557.

Vitell, S.J. and Paolillo, J.G.P. (2004), A cross-cultural study of the antecedents of the perceived role of ethics and social responsibility, Bus Ethics European Review, Vol. 13, No. 2, pp. 185–199.

Waddock, S.A. and Graves, S.B., (1997), The corporate social performance – financial performance link, Strategic Management Journal, Vol. 18, No. 4, pp. 303-319.

Wahba, H. (2008), Does the Market Value Corporate Environmental Responsibility? An Empirical Examination, Corporate Social Responsibility and Environmental Management, Vol. 15, No. 2, pp. 89-99.

Walton, C.C. (1967), “Corporate social responsibilities”, Wadsworth, Belmont, California.

Wang, H.D. (2010), Corporate social performance and financial based brand equity, Journal of Product and Brand Management, Vol. 19, No. 5, pp. 335-345.

Wood, D.J. and Jones, R.E., (2005), Stakeholder mismatching: a theoretical problem in empirical research on corporate social performance, The International Journal of Organizational Analysis, Vol. 3, No. 3, pp. 229-267.

Wood, D.J., (2010), Measuring Corporate Social Performance: A Review, International Journal of Management Reviews, Vol. 12, No. 1, pp. 50-84.

Woodward-Clyde, (1999), Key Opportunities and Risks to New Zealand’s Export Trade from Green Market Signal, Auckland, N.Z. : Woodward-Clyde.

Zhen-Yu Zhao, Xiao-Jing Zhao, Davidson, K. and Jian Zuo, (2012), A corporate social responsibility indicator system for construction enterprises, Journal of Cleaner Production, Vol. 29-30, pp. 277-289.