Essay On The Impact Of Corporate Social Responsibility On Firm Values

718 Words 3 Pages
Introduction
This paper entitled ‘The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness’ written by Henri Servaes and Ane Tamayo aims to illustrate the relationship of corporate social responsibility (CSR) and firm value to firms’ customer awareness. This paper also showed certain conditions on when CSR activities can add value to the firm. Furthermore, the impact of companies’ poor reputation to CSR-value relation is examined in this paper.

Article Summary
Before covering the ways in which CSR practices can enhance a firm value, the paper started to define the scope of what can be considered as a CSR activity. While this paper pointed out that there are a number of views of what can be considered
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Therefore, it is doubtful that companies with a poor reputation to realize some instant benefits.

Critical Reflection
Corporate social responsibility is very broad notion that relates to the relationship between a company and its stakeholders. According to the United Nations Industrial Development Organization (UNIDO 2017), “Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders”.

The article made a worthy introduction emphasizing the concept of CSR as an essential piece of business activity. It specified that diverse studies have drawn divergent conclusions as to the impact of CSR activities to a company’s profitability and firm value, hence pointing out a problem statement if such activities really increase shareholders’ value as impacted by customers’
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1421) which presented that a business’ socially responsible acts can shift positively the customers’ insights on the company’s products’ performance. Additionally, they have also noted the CSR’s benefits diminished when consumers ascertain that company’s deeds are self-interest driven as opposed to an act of kindness. The same is consistent with the findings of Kang and Hustvedt (2013, p 262) which showed that consumers’ perception of CSR efforts is a vital aspect of building consumers’ trust leading to their increased intent to subscribe socially responsible firms’ goods and

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