Impact of corporate social responsibility - Free Essay Example

Sample details Pages: 17 Words: 5029 Downloads: 7 Date added: 2017/06/26 Category Statistics Essay Did you like this example? Summary The objective of this research is to study the impact of Corporate Social Responsibility (CSR) on financial performance. The trend of CSR addresses a major challenge in providing a broader representation of the business environment, understood not simply in its economic and financial but also social, human and ecological through an operationalization and verification of the theoretical model proposed in a sample of Tunisian firms, evidenced by a questionnaire sent to 30 companies Tunisian drawn. The results are the lack of link between CSR and financial performance measured by the accounting ROA, while there is a positive if financial performance is measured by ROE.. Don’t waste time! Our writers will create an original "Impact of corporate social responsibility" essay for you Create order Keywords: Corporate Social Responsibility of Firms, Financial Performance, Rsum Lobjectif de cette recherche est dtudier limpact de la Responsabilit Socitale de lEntreprise (RSE) sur la performance financire. La RSE rpond un enjeu majeur, en proposant une reprsentation largie de lenvironnement des firmes, entendu non seulement dans ses dimensions conomiques et financires, mais aussi sociales, humaines et cologiques. A travers, une oprationnalisation et une vrification du modle thorique propos, au niveau dun chantillon dentreprises tunisiennes, matrialis, par un questionnaire adress 30 entreprises tunisiennes tir au sort. Les rsultats obtenus relvent labsence de lien entre la RSE et la performance financire mesure par lindicateur comptable ROA, alors quil existe un lien positif si la performance financire est mesure par lROE. Mots cls: Responsabilit Socitale de lEntreprise, Performance Financire 1- INTRODUCTION In the 1850s, the role of the company was seen as a purely economic, and bounded to the maximization of profit for shareholders. In this regard, such an approach is consistent with a classical view of the firm where management essentially concerns managers and shareholders (Friedman, 1970). Further, the company was faced increased pressure from its stakeholders (Freeman, 1984). In this regard; it should take into account the effects of its activities in the communities where it operates. This brings her back to reconsider its relations with its stakeholders and to reconcile the often conflicting objectives of various interest groups. The idea of social responsibility of business now (CSR) responds to this challenge by providing a broader representation of the business environment, understood not simply in its economic and financial but also social, human and ecological. Any company that wants to ensure its sustainability, an imperative for financial performance, but also should not ignore or largely ignore the societal benefit that is to say, to engage in a societal approach. The objective of this research is twofold , first to study the impact of CSR on financial performance. Second in a more explicit, we wish to study in the target companies in our survey, the degree of perception of the concept of social responsibility through five dimensions namely: economic, legal, ethical, discretionary, and environmental. In this part, our problem is as follows; What is the impact of social responsibility of corporate financial performance? 2. SOCIETAL RESPONSIBILITY OF THE COMPANY (CSR): TOWARDS THE EMERGENCE OF A NEW CONCEPT Being responsible is to ensure their actions and their consequences and to accept accountability. But when this term is applied to the company, it is a concept that can be understood in different ways. Nowadays, the definition and delimitation of the concept of social responsibility still the subject of controversy and conceptual differences. So, social responsibility has been the subject of increased attention by many organizations of diverse nature, the European and global institutions, professional associations and business networks, Its emergence is born with Bowen (1953) who scored in the first initiative CSR refers to the requirement for businessmen to carry out the policies, decisions and follow the guidelines spreading objectives and values that are considered desirable in our society. Subsequently, MC Guire (1963) argues in his work that the idea of social responsibility implies that the firm has not only economic or legal obligations but also has responsibilities to society that go beyond these obligations . Then, Davis (1973) emphasizes that CSR refers to the consideration by the business issues that go beyond its economic obligations and the technical equal and close to the answers that gives these companies problems. This means that CSR begins where law ends. For Carroll (1979) CSR integrates all economic expectations, legal, ethical and philanthropic society may have in respect of a company at a time. While Jones (1980) stresses the idea that companies, by then the statutory or contractual obligation to have a societal actors. Similarly, Wood (1991) anchors his discussion on the meaning of the liability can be seen that through the interplay of three principles: legitimacy, public responsibility and distinction of three levels of institutional analysis, organizational and individual. In reality, these definitions are generally content to highlight the discretionary nature of CSR, highlighting the fact that it recognized the dimensions beyond the purely economic or legal activity of the company. What brought Carroll (1979) distinguish four categories of CSR: The economic responsibility The legal liability, Responsibility Ethics Responsibility discretion. 2.1 Approaches to CSR measures Measuring CSR is a necessary condition for knowledge of their own social responsibility and thus to control environmental and social impacts. Assessing the social and environmental performance, the establishment of a steering system for the performance and accountability on these external dimensions imply the existence of metrics to assess the quality of management of the business related non-financial. In fact, the existence of these metrics is also of particular importance to other stakeholders that ethical investors who require such information to select the best performing companies on the main criteria the quality of resource management Human and respect for human rights. This leads companies to establish a legal and socio-technical infrastructure to make measurable CSR stakeholders. In theoretical terms, the extent of CSR faces similar problems to those identified to define the concept of CSR: the multiplicity of approaches and dimensions of this complex concept, difficult to r eport objectively its components more subjective often linked to an assessment based on criteria related to ethics or a social context. 2.1.1 Measuring CSR in the academic literature Among the different methods of measurement of CSR that have been used, we can distinguish five categories: Measures of speech, such as content analysis of annual reports, which are to be based on remarks made by companies to assess their CSR, for example by counting the number of lines or words dedicated to themes CSR in the annual report of a company; Indicators of pollution provided by some agencies to assess the pollution of businesses, such as the Toxic Release Inventory in the U.S., or for example measurements of the diffusion of CO2 by businesses; Measures of attitudes and values aimed at assessing the sensitivity of members of the organization (eg managers, employees) to the various dimensions of CSR and are generally administered in the form of a questionnaire; Measures of reputation, such as the indicator of reputation developed by Markowitz in the 1970s in the American magazine Fortune, which includes criteria related to CSR that are assessed by a panel of industry experts to which operates within the enterprise in question; The behavioral measures or audit, developed by the agencies that specialize in the assessment of social behavior and environmental responsibility, such as the U.S. KLD, EIRIS in Britain or in France Vigeo. 3. FINANCIAL PERFORMANCE: DEFINITION Performance is tried to rely on market efficiency that ensures the best allocation of resources and rejects any notion of corporate responsibility other than making profit for its shareholders. As a design performance based on an external view (the current shareholders and potential), often linked to the stock exchange during the action of the company. The performance measures are thus based on data from financial statements. The control and management are geared towards the minimization of costs and return on investment. It is a large building which includes questions on the financial performance within the organization. For a financial indicator, the financial performance of the organization is measured by its financial validity, such as accessibility to different sources of funding or its profitability compared to its investments, its assets or its equity. 2.1 MEASUREMENT OF FINANCIAL PERFORMANCE According to empirical studies, accounting measures provide most of the time positive correlations between CSR and financial performance. (Cochran and Wood, 1994; Waddock and Graves, 1997; Preston and O Bannon, 1997; Stanwick and Stanwick, 1998; Balabanis, Hugh and Jonathan, 1998, Moore, 2001; Rufetal, 2001). In addition, these measures from the accounts have the advantage of providing a more relevant measure of economic performance of the company and predict a more reliable the possible link between CSR and financial performance. On the other hand, the stock market measures have the advantage of being less prone to managerial manipulation. Especially since they represent scores of investors on the business ability to generate economic benefits (Mc Guire et al, 1988). However, these variables are evaluated specific investor and does not allow to reveal the economic reality of the business (Ullmann, 1985), the results that emerge from studies using measures such as stock market are mi xed, Markovitz, (1972) found a positive relationship, Vance (1975) proves otherwise, and Buchotz Alexander (1978) found a weak correlation or no. Griffin and Mahon (1997) stress that results from market-related measures are mostly negative and called for greater use of accounting measures. To better understand the financial performance and provide a more comprehensive or less of the latter, further research incorporating both measures at a time (Mc Guire, et al, 1988; Balabanis, Hugh and Jonathan, 1998, Moore, 2001 ; Seifert; Maurras and Barktkus, 2003, 2004). 4. SOCIETAL RESPONSIBILITY AND FINANCIAL PERFORMANCE 4.1 CSR and financial performance: theoretical approaches 4.1.1 The existence of a relationship between CSR and financial performance The theoretical approaches to corporate social responsibility are essentially based on the current contract philosophers and sociological neo-institutionalism. They particularly questioned the compatibility between market logic and the goal of maximum profit that underpin the economic rationale of the business and societal concerns such as sustainable development, intergenerational equity, the general interest which are purposes prior to appearing foreign or contrary to the entrepreneurial logic. In other words, the exercise of social responsibility of business is it an impossible synthesis between the collective demands long-term expectations and short-term private? The theoretical basis is between two opposite poles: on one side, the neoclassical theories, based on market efficiency, reject any idea of social responsibility of business other than making profit for its shareholders (Friedman, 1970). On the other, theories that mobilize a teleological principle and argue that there i s a moral responsibility of policy makers towards future generations and a large number of societal problems. However, the only approach moralistic-ethical is not sufficient to illuminate the strategic behavior of firms in the societal area because it does not understand the motivations of corporate behavior. In this approach, stakeholders influence policy decisions of leaders and they are accountable to them about how they took into account their expectations. 4.2 The stakeholder theory From the 1980s, the theory of stakeholders (Stakeholders theory) is gradually accepted as a framework to further specify the groups vis--vis what the enterprise is (or should exercise) its societal responsibilities. The work of Freeman (1984) popularized this theory by proposing to define as stakeholder all persons or groups who are likely to affect and / or be affected by the conduct of the strategy of undertaking. The theory of stakeholder theory is now the most frequently mobilized both by researchers as actors in the business. She entered the company at the heart of a set of relationships with partners who are not only shareholders (Shareholders), but players interested in or affected by the activities and business decisions. The stakeholder theory is not exempt from a normative vision and ethics but it seeks to integrate economic goals: it states that cooperation contracts establish trust between the firm and its stakeholders and provides a competitive advantage the company. One might wonder whether the inclusion of stakeholder expectations is not rather the result of traditional rules of management that the outcome of a deliberative process of integrating moral principles. Despite its omnipresence in all the literature on corporate social responsibility, this theory remains ambiguous about its theoretical basis and presents a number of limitations. On the one hand, it is part of a relational representation of the organization based on fair contracts that involve conflicts of interest may be resolved by ensuring a maximization of the interests of each group. On the other hand, it would be unrealistic to consider a comprehensive consideration of all potential stakeholders. The rationality of leaders is necessarily limited by the urgency of the problems, pressures and information systems available to them that they decided to put in place. A first theoretical approach suggests that the company is more successful socially; it is more efficient economically and financially. Instead, the company will be more economically efficient and less it will be socially. Finally, beyond these two extreme views, it is possible to consider the assumptions of positive and negative synergy that cross the different conceptual foundations. With these assumptions also added a generic assumption of neutrality of interactions: Gond, 2001) and assuming a more complex relationship. 5. CSR and financial performance: Many theoretical explanations The theoretical explanations to clarify the nature of the relationship between societal and financial performance are numerous. They can be organized into three distinct categories: explanations postulating the existence of linear relationships between these two constructs, explanations suggesting no link between the two constructs, and finally explanations assume the existence of nonlinear relationships between these two variables. 5.1 The models suggest a positive link between CSR and performance Two theoretical models support the idea of a positive impact of CSR on financial performance (Social Impact Hypothesis) and the assumption of funds available as excess resources available to discretionary managers or Organizational Slack (Available Fund Hypothesis). According to the hypothesis of positive social impact, companies with a high level of CSR demonstrate their ability to master the implicit costs and negative externalities of the organization and report to stakeholders and the quality of their management. The theory of stakeholders (Stakeholders theory) that establishes the hypothesis of the influence of social practices, has created a vast literature on the interaction between CSR and firm performance (Freeman, 1984, Cornell and Shapiro, 1987; Ullmann, 1985, Clarkson 1995, Donaldson and Preston, 1995): Satisfaction with the business objectives of stakeholders promotes the improvement of economic and financial performance (Freeman, 1984). The second model, that of Organizational Slack addresses the link between social performance and economic performance by proposing the idea that this is not the social responsibility that is the condition for obtaining a high level financial performance but, instead, the level of financial performance which allows the company to engage in socially responsible actions. Mc Guire et al, (1988) reported that financial performance could improve the level of social performance and their work has been partially confirmed those by Preston et al, (1991). The profitability of the business differential is then a condition of social behavior; Kraft and Hadges (1990) have shown that excess resources and the attitude of managers towards society strongly influence the level of responsibility social enterprises. 5.2 The models suggest a negative relationship between CSR and financial performance Unlike the two previous models, others say that companies realize the best social performance are also those with the worst economic performance and vice versa in this spirit, a negative relationship between societal performance and financial performance dominates. The literature suggests two models that assume a negative relationship between CSR and performance, distinguished by the nature of causality assumed. The first model Trade-Off Hypothesis or assumptions arbitration assumes that the inclusion of corporate social responsibility involves additional financial costs resulting therefore a competitive disadvantage (Friedman, 1962, 1970). In this perspective, any move away from socially responsible leaders of their goal of maximizing profits (Aupperle, Carroll and Hatzfeld, 1985). Drucker (1984, p.58) states that making a profit is fundamentally incompatible with the social responsibility of business 5.3 The models suggest a positive or negative synergy The typology developed by Preston and OBannon (1997) suggests two hypotheses that are based on different theoretical approaches outlined above. Indeed, in the context of a comprehensive model explaining it is possible to envisage a virtuous circle (positive synergy): a high level of social performance leads to improved financial performance that provides the opportunity to reinvest in social actions responsible (Waddock and Graves, 1997). In contrast, a low level of societal performance led to a decline in financial performance limits, therefore, socially responsible investment (negative synergy). 5.4 The models suggest a missing link The conceptual contributions of Mc Williams and Siegel (2001) lead Gond (2001) to complete the typology of Preston and O Bannon (1997) by formulating the hypothesis of no link between the two dimensions. Indeed, Mc Williams and Siegel (2001) propose a model of supply and demand for social responsibility that helps explain the lack of consensus results obtained by empirical academic studies. According to them, there is a supply and demand for social responsibility, in a standard micro, who led each of them to invest socially to meet the demand of stakeholders. Market equilibrium cancels costs and profits generated by successively supply of social responsibility. This approach leads to a hypothesis of neutrality of interactions between social performance and financial performance. 5.5 The models suggest a more complex relationship The results obtained by Bowman and Haire (1975) led Moore (2001) also refine the typology of Preston and OBannon (1997) and the hypothesis of positive relationship between more complex two-dimensional. Indeed, Bowman and Haire (1975) but also, more recently, Barnett and Salomon (2003) showed a non-linear U-shaped inverted between social performance and financial performance, indicating an optimum level beyond which socially responsible investment longer improves financial performance. The multiplicity of theoretical hypotheses advanced to explain the nature of interactions between CSR and financial performance has led to develop empirical tests to define the conditions of validity of the various mechanisms invoked.. 6. CSR and financial performance: empirical approaches Clarification of the economic impact of CSR has always been a major concern in the field of study on the relationship between business and society. It is therefore not surprising that empirical work on this issue have been very numerous, there were in 2007 more than 160 empirical studies on the subject. This work focused on the nature of interactions between the firms ability to achieve a high level of CSR and financial performance by studying the interactions between on the one hand, social performance (or societal) Company (CSR) and, secondly, its financial performance (FP). These interactions have been studied mainly through two levels of analysis we will present successively: Many publications over the last twenty years have highlighted the link between social responsibility and financial performance of the company. But these studies show conflicting results do not establish clearly the existence of a positive or negative relationship between social responsibility and financial firms (Preston and OBannon, 1997; Griffin and Mahon, 1997; Mac Williams and Siegel , 2001, Margolis and Walsh, 2002). The lack of theoretical foundation and conceptual studies, lack of uniformity in evaluation of social responsibility and financial and methodological shortcomings found explain the poor results obtained. Studies most recent research (Griffin and Mahon, 1997; Roman Hayibor and Agle, 1999, Margolis and Walsh, 2003) found a slight advantage for the detection of positive links between societal performance and financial performance . The synthesis of the literature identifies 122 studies published between 1971 and 2001 with an accelerating pace of recently published (35 studies between 1997 and 2001) and far (2007) on more than 160 empirical studies on this subject, but also this research were sometimes biased in the direction of the illumination of a positive relationship. For example, the 122 education fifty and claim a positive association between social responsibility and financial performance twenty get mixed results, twenty seven indicate no ties and seven observed a negative relationship. 6.1 The hypothesis of impact-social Social Impact Hypothesis According to (Freeman 1984, Donaldson and Preston, 1995), stakeholder theory has explained the origin of the favorable influence social behavior on financial performance. Indeed, CSR is an indicator of the ability of business to effectively meet the demands of various stakeholders. This has consequently regained their confidence and thus improve profitability (Balabanis, Hugh and Jonathan, 1998). Waddock and Graves (1997) speak of Good Management Theory that there is a high correlation between good management practice and CSR, simply because an improvement in social activity entails a special relationship with Key Stakeholders Groups (Freeman, 1984), implying more performance. In addition, a review of empirical literature confirms a positive relationship between the two components (Mc Guire et al, 1988; Waddock and Graves, 1997; Preston and OBannon, 1997; Verschoor, 1998, Stanwick and Stanwick, 1998; Mc Williams and Siegel, 2000, Moore 2001, Ruf et al, 2001, Orlitsky, 2001; Kohers an d Simpson, 2002). Allouche and Laroche (2005) identified 82 research, 75 of them have found a positive link, while Margolis and Walsh (2003) who counted 54 out of 127 studies confirming the positive relationship. Hence our first hypothesis H1: Social responsibility has a positive impact on financial performance. 6.2 The Trade-Off Hypothesis This hypothesis refers to the classical theory of Friedman (1962, 1970) that CSR is an investment that increases costs and takes place at the expense of financial performance. For example a decision to invest in equipment acquisition environmentally friendly while other competitors do not, can generate a competitive disadvantage. Hence the reduction in profitability which may cause discontent among shareholders. This finding was also confirmed by Aupperle et al, (1985), the authors conclude that social activities such as donation to charity, environmental protection and community development dissipate more resources and generate additional costs, which disadvantages the company against its competitors less engaged in social actions. Searches return the negative relationship to abnormalities in particular methodological tools to measure financial performance. The negative association is due to the use of market variables as a measure of financial performance (Griffin and Mahon, 1997). In reality, the number of studies that lead to a negative relationship is very small, Margolis and Walsh (2003) identify 127 studies dealing with the subject in question, and they found that only 8 of them expect a negative correlation between the two dimensions. of where our second hypothesis H2: The social responsibility has a negative impact on financial performance. 6.3 The lack of connection between the two dimensions Some authors suggest that CSR and financial performance are both built entirely separate. Ullmann (1995) emphasizes that the link from a pure coincidence. The correlation is generated, according to the author, by intervening variables that occur in an unpredictable manner and that link the two constructs. Meanwhile, Waddock and Graves (1997) show that the methodological problems in operationalizing CSR tend to obscure the link. A multitude of empirical studies have provided no link between the two dimensions (Aupperle et al, 1985; Fogler and Nutt, 1975; Abbot and Monsen, 1979, Freedman and Jaggi, 1986; ONeil, Mark Saunders and Carthey 1989; Seifert, Maris and Barkus, 2004, Graves and Waddock, 1999). Others state that the link is weak or nonexistent (Alexander and Bchholz 1978, Cochran and Wood, 1984; Krauz and Pava, 1996; Berman et al, 1999; Balabanis, Hugh and Jonathan, 1998, Seifert and Morris Barktkus , 2003). Griffin and Mahon (1997), Balaban, Hugh and Jonathan (1998) found that the results are inconclusive: the variables selected do not distinguish between successful firms and inefficient firms. In this context, our third hypothesis H3: There is no link between social responsibility and financial performance. 7. CSR and financial performance: The effect of control variables Research has shown that the relationship between CSR and financial performance is not absolute, it must take into account the weight of the elements of each company (Ullmann, 1985; Waddock and Graves, 1997) and are likely to moderate the relationship between the two constructs. These characteristics are operationalized as control variables. 7.1 The effect risk The risk is variable, with several studies in different contexts have shown that it controls the relationship between the two dimensions. The argument assumes the risk that companies have a low risk to commit advantage in social activities, and vice versa. Companies with low risk have a stable performance model, and therefore, this situation seems very conducive to investment in social activities (Roberts, 1992). Aupperle et al, (1985) postulate that firms more socially responsible are identified as being better managed and risks are minimal. This finding is especially approved by the study of Mc Guire et al, (1988); ONeil, Mark Saunders and Carthey (1989), Waddock and Graves (1997), Graves and Waddock (1999). In contrast, Aupperle et al, (1985) found a correlation, positive correlation between CSR and risk accounting, and negative but not significant between CSR and market risk. 7.2 The effect size The argument for the size stipulated that organizations undertake major advantage in social actions; small organizations do not give importance to social activity (Waddock and Graves, 1997). Burke et al, (1986) argue that companies, as and as they grow, give more attention to external factors and better meet the demands of stakeholders, Stanwick and Stanwick (1998) found that size, measured by the volume of sales and total assets is positively related to CSR. Mc Guire et al (1988) find a positive but not significant between CSR and the size measured by total assets. 7.3 The effect sector The sector as designed in the literature is a moderating effect of CSR and PF relationship, eg the extent of the consideration of environmental responsibility by a chemical company is not the same a financial institution. A plurality of researchers took into account the control variable as in include: Waddock and Graves, 1997, Griffin and Mahon, 1997, Graves and Waddock, 1999; Balabanis, Hugh and Jonathan, 1998, McWilliams and Siegel 2000, Moore 2001, Ruf et al, 2001; Seifer, Morris and Barktkus, 2003.2004. 8. theoretical model 9. METHODOLOGY OF RESEARCH The objective of empirical research is to empirically test our research hypotheses and the theoretical model proposed. In order to test the validity of our assumptions on a sample drawn from all Tunisian companies, we proceeded by two steps the first is to measure the perception of Tunisian companies to the concept of CSR and then study the impact of this latest financial performance. Through our research, we chose the method of direct interview, and for several reasons, we conduct a field investigation, by adopting the technique of direct investigation on the basis of a questionnaire. The survey covered a sample of 30 Tunisian companies selected from different sectors. 9.1 The scale of measurement of CSR predictor For measurement of CSR, we will adopt that developed by Maignan et al (1999), which forms part of the work on measuring social performance. This scale operationalizes the concept of social performance by measuring the dimensions of the construct. In fact, two major scales have been developed in this perspective: The oldest is that of Aupperle, Carroll and Hatfield (1985) measuring the orientation of managers towards social responsibility, the latest and most complete is that of organizational citizenship Maignan et al. (1999), reused by Maignan and Ferrell (2001). These two instruments take over the traditional classification in four types of social responsibilities of Carroll (1979): economic, legal, ethical and discretionary or philanthropic organizations that are a reflection of society see the company actively engaged in its local environment and / or global defense of social causes and public interest. Regarding the scale of Aupperle et al (1985), it is intended to measure only the views of leaders on the relative importance of each of the four dimensions of social responsibility of business. While the scale of Maignan et al. (1999) is designed to gather perceptions of the social performance of the business stakeholders throughout the company (Maignan and Ferrell, 2001). Indeed, the scale was constructed from academic studies describing activities commonly accepted as citizens by the three main stakeholders ie employees, customers, stakeholders public. These authors manage this work, mainly to executives (Maignan et al 1999, Maignan and Ferrell, 2001) to have completed the questionnaire as relevant as the leaders and general information about the company cutting. Hence, our questionnaire has five dimensions are those of Carroll (1979), added an environmental dimension whose items are inspired by the Global Compact (1999). This choice is argued by the importance it attaches to the environment today, and the pressures that companies face to reflect the impact of its activities on the environment in which it operates, it is relevant namely the impact of the inclusion of the natural environment on the financial performance of Tunisian firms. 9.2 The measure of financial performance: variable to explain The various empirical studies testing the relationship between CSR and financial performance have opted for the latter measure, accounting measures, or measures for stock market listed companies or both sets. In our case we use accounting measures that our sample consists of companies listed and unlisted. The measures derived from accounting are: 9.2.1 The performance of assets ROA Means various researchers who have opted for this measure are: Aupperle et al. 1985 Mc Guire et al. 1988; ONeil Sunders and Mc Carthey 1989, Waddock and Graves, 1997, Griffin and Mahon, 1997; Preston and OBannon, 1997, Graves and Waddock, 1999; Seifert, Morris and Barktkus 2003, Simpson and Kohers, 2002, Berman et al, 1999. ROA = Net income / Total assets 9.2.2 The returns on equity ROE Bowman and Haire, 1975; Pava and Krausz, 1996; Waddock and Graves, 1997, Griffin and Mahon, 1997; Seifert, Morris and Barktkus 2003; Verschoor, 1998; Balabanis, Hught and Jonathan 1998, Ruf et al, 2001; Preston and OBannon, 1997. The financial data used are those from 2004, 2005, 2006 and 2007. ROE = Net income / Equity 9.3 Control variables We took into account three variables that can affect controls that are either CSR or financial performance, which are the effect size, effect and risk effect industry. The size is measured by the logarithm of total assets (Seifert, Morris and Barktkus, 2004; Kohers and Simpson, 2002, Johnson and Greening 1999). Risk is measured by the debt ratio as suggested by Waddock and Graves (1997) and Ullman (1985). Ratios of debt = Total Debt / Equity The sector is taken as a moderator variable (Waddock and Graves, 1997, Griffin and Mahon, 1997, Graves and Waddock, 1999, Balaban, Hugh and Jonathan, 1998, Mc Williams and Siegle, 2000; Moore, 2001; Ruf et al, 2001; Seifer, Morris and Barktkus, 2003, 2004). 10. Check the measurement model of CSR We present in what follows the procedures we use to verify the reliability and validity of the scale of measurement of CSR. The analysis was performed using the software for data analysis SPSS13.0. Various steps must be taken to ensure that the analysis is properly conducted. We begin by submitting the scale factor analysis. In terms of characteristics, we have selected the initial structure in the Statistical Area and weightings, significance levels and index KMO and Bartletts test in the correlation matrix. The KMO test used to quantify the degree of correlation between variables and the appropriateness of factor analysis. This indicator is between 0 and 1. The test of sphericity of Bartlett (1954) tests the hypothesis of no correlation in the correlation matrix. This test must be significant that the data are factorization (p

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Management Strategy of Woolworth Company-Free-Samples for Students

Question: Discuss about the Management Strategy of your Chosen Company. Answer: Introduction Woolworths Limited is an Australian based company. It has retail interest in Australia and New Zealand. The organization started in operations in 5th December 9124 in the basement of the old imperial arcade in Sydney. The company started as a single store. Woolworths was the first company to use cash registers that that print receipts for its clients. The organization operates through various retail sections; supermarkets, liquor retailing, hotels and pubs, and discount department stores. The organization has grown over the years to become Woolworth's limited companies. The list of the organization's companies includes; Woolworth supermarket, Woolworths online, food for less, Flemings, Thomas Dux Grocer, and macro whole foods market. Woolworths Limited is the second largest organization in Australia. Management Strategy A business is successful if all the right parts come toplay together. A good idea, an effective plan, a market opportunity, and a competent team.(Ready 2016). Woolworth limited employs a market strategy that is inclusive of the management and the staff. The management strategy focuses on the maximization of employee potential in driving the company forward. The company invested heavily on the management. The managers must be skilled in many aspects of the business. They should particularly be skilled with the ability to share the organizations vision to the workers in a manner that the workers can visualize the vision.(Barker 2014). Woolworth limited management strategy key focus is good employee relations. In any organization, the relationship between the workers and the employers and the relationships among the workers themselves is crucial to the wholesome functioning of the organization. Both labor and management are vital to any organization hence they should be well integrated. Employee relations are influenced by various factors which include: unions, communication, company culture, and wages. Any organization strives to ensure that that employees relate to the management as well as to which other in a friendly manner. Woolworths limited management realizes that it is essential that the employees work together as a unit and contribute equally to achieving the companys objectives(Omur Hakan Kuzu 2014). The management to that effect is pluralistic and not unitary. Under the pluralistic perspective, there are different beliefs, values and behaviors and the authority is not singular but rather there are opposing personnel to the authority. The pluralistic perspective embraces conflict and views it to be helpful if well controlled within an organization. The role of the management is to offer solutions and guidance regarding conflicting interests. The organizations management strategy focuses on three key issues or perspectives. Reason why- the management ensures that it gives the employees the impact their work will have. The employees are told why the tasks they are assigned are important, how they will be of value to the customers and the company, and how the task will contribute to the achievement of the employees needs. Curiosity- the management often seeks the employees input in decisions concerning an area of interest. Instead of always giving orders, the directorate enquires from the employees what they think should be done. Trust- the companys management allows employees to make decisions on their own regarding the job they are doing. The workers are allowed to organize themselves and carry out their jobs as they see fit. Woolworth limited is committed to employee performance and achieving the company objectives. The company success is based on inclusivity of every member of the organization and the commitment everyone shows in undertaking assigned tasks. The company aims at being the leading retail company in the state. The strategy statement of the company reflects the commitment of the management towards driving the company towards achieving its goals. The company strategy statement covers the requirements of the good strategy statement. The statement consists of the three components; objective, scope and the competitive advantage (MaRS, 2013) . Woolworth limited strategic statement states: to be the leading retail company in the state by offering quality services and products through employee training to develop the ideal employee. To have a workforce that is all rounded in sales and service delivery as the heart of the organization. To enable this employee development, there three key players in the company with their roles outlined; Managers: the manager is the team leader in the organization. This implies that the role of the manager has a big impact on employee relations. The first role of the manager is to get to know the employees well and know their capability, limits, and interest. This will ensure that the manager assigns tasks in accordance to the employee specialization and thus no employee will feel burdened. The managers also have the role of being impartial. No preferential treatment should be given to any employee but rather all employees should be treated as one. All employees should be rewarded for a job well done and should also be corrected whenever they fail in the workplace. The manager should also be easily accessible to the employees. This will enable the employees to interact with the management often. The manager has the duty to encourage employees to work harder and to outdo each other but in a friendly manner and not turn against each other. Interaction of the employees and the managemen t socially is also important for employee relations. The manager is expected to be available to the employees even on a social platform for example when the employees are taking their lunch. This will enable the employees to bond with the management and thus they can be more comfortable during working hours (guide 2008) Human Resource Department: The human resource department handles conflicts that arise within the organization. The conflicts can either be between employers and employees or among the employees themselves. The human resource enhances proper employee relations by ensuring that the working standards are upheld at all times. The department is tasked with the role of handling complaints from employees. Complaints can be issues between co-workers or even between management and employee. The HR department assists in helping to settle the differences. This helps the employee to be focused and work comfortably. The HR department is also involved when an employee wants a salary raise. The department analyses the employee performance and determining if the raise should be awarded. This gives the employee the basis on which to request a raise and also gives the employer the basis on whether or not to award the raise taking under consideration the report presented by the HR department. The HR department is also tasked with the duty to assist employees. Employees may have some personal problems that get in the way of their work performance. Such problems could include alcohol and drug abuse. The department is responsible for ensuring that such employees receive the required assistance. The workers are then able to function to the potential at work and thus the management feel satisfied by the quality of work and therefore no issues arise between the employees and the management. The HR department at Woolworth limited is composed of professionals from various fields to ensure that all issues are handled to everyones satisfaction and also to ensure that the working conditions are up to standards so as to enable the employees to work comfortably Employees: Employees are also key players in employee relations. They also play a vital role in determining the relations between them and the managers. Employees are required to follow a particular set of work ethics at the Woolworth limited company. Strong work ethics are good for both the management and the employees. With a strong work ethic employees are motivated to face the everyday challenges and always perform to their potential (Whitmore, 2015). Employees are required to abide by the stipulated company policy. They should observe punctuality, proper dressing code, and show respect to the management and senior officials. Employees should be present their issues to the management in a respectful manner and avoid arrogance. They should also handle the organizations property with care and avoid damages or steal from the organization. Hard work is also another factor that influences employee relations. Hard work results in more productivity and thus higher incomes for the organization. Self-motivation is another strong factor that influences the managersview on the employee. Self-motivated employees are easier to deal with since they require no push. A good employee should also be a team player and should be able to work with the other colleagues to achieve set objectives or deadlines. Employees should learn to set aside their personal issues while at the workplace and should be able to work with any colleague regardless of any personal issues they might have outside work. At the Rand Enterprise employees are required to follow the work ethics with no exemptions. There is an annual assessment of the code of conduct and any violation of the work ethics note is pointed out and the employees encouraged stopping. The companys strategy statement gives a direction on which management strategy to implement. To enhance the strategy implementation, the management has ensured that the Rockefeller habits are applied in the company. The Rockefeller Habits by Verne Harnish are a checklist of behavior in the company. The idea behind the Rockefeller habits is that once the management masters the ten concepts, the company will undergo transition to success in terms of meeting the objectives and that the people will be driven by purpose and passion (Ade 2017). The organization has implemented the strategy with the guidance of the strategy statement. The employees are the heart of the organization and the company develops them by training and exposure. The employee relations at the company are good in all the sectors. Employees are free to interact with the management and engage in discussions on issues facing them at work. The organization upholds the agreements with the trade unions and strives to ensure that the workers are comfortable working. The management realizes that the success of the employees is also the success of the company. The implementation of the strategy was not faced will much difficulties. The employees embraced the concept of interacting with their seniors and the managers appreciated the duty of taking the leadership role and leading their juniors from the frontline. The strategys core is workforce development and so the company ensures are comfortable. Competition is encouraged in the company with the managers on guard to ensure that competition does not result in the rivalry. Competition has the potential to increase labor productivity as well as efficiency (Ramsay 2015). The competition in the company may affect the team spirit or exert unnecessary pressure on the employees which may affect their health (Shukla 2009) and so the management and the supervisors are always on high alert to ensure that the competition does not go to that extent. A good management strategy also has a conflict resolution process. Conflict is inevitable in any organization. The conflict resolution process needs to be effective to ensure that the issues are resolved to the satisfaction of the affected parties. Woolworth limited has a conflict resolution process that is effective in resolving the internal issues. In every organization, conflicts exist in different forms. There is the kind of conflicts that are considered arbitrary and do not have much weight on the functioning of the organization. There also the kinds of conflict that show disagreement on a large scale and are very serious (Doyle 2017). These are the kinds of conflict to which attentions are given and a permanent solution is provided. The Woolworth limited company takes conflict issues very seriously and to this effect, the enterprise always keeps to date with the development of dispute procedures in relation to the employment law. Every conflict situation has procedures that sho uld be taken with an aim of finding a solution. Woolworth limited employs the following procedures in conflict resolution. Consulting the relevant supervisor-before a conflict reaches the management, the affected employees first present the issue to their immediate supervisor through writing. The supervisor then responds to the letter by writing back to the employees and setting up a meeting to try and resolve the issue and when no solution isarrived at the matter proceeds to the management. The immediate supervisor is consulted to get a detailed report on the issue. Issuing of a written complaint and initial decision- if the affected employee was not satisfied with the solution offered by the supervisor, the employee proceeded to write a letter to the HR department to the department head within a time frame of 4 working days. The letter should contain information on the issue and the date of occurrence, suggestions on ways of resolving the issues and a copy of the supervisors report concerning the issue should be attached. The department head then schedules a meeting with the affected employee to discuss the complaint and later gives an oral and written decision. Seeking an appeal to the decision- in the situation where the affected employee is not satisfied with the decision of the department head, the employee can appeal within 5 days to the HR department. The HR department then schedules a meeting and invites all parties involved in the conflict with a review committee if the conflict seems to be very serious. If the affected employee fails to advance within the given time limits from one level in order to appeal on another level, then the conflict is considered to be resolved and that the initial decision made was satisfactory. Employee relations play a great role at the Woolworth limited company when it comes to conflict resolution. In a selected conflict situation key employee features were being portrayed. In a situation where an employe had been victimized by a co-worker and the case advanced through all levels. The following employee relations features were evident; Communication- communication is very important in the conflict resolution process. The affected employees should be able to write to the supervisor and all the other levels above that and receive feedback within the set time frame. Effective communication can go a long way in solving a conflict while bad communication can worsen the conflict. The employer should communicate openly with the employee and allow the employee to do the same. Inclusion of the employee- the relevant authority dealing with the case should include the employee on all decisions made and seek the employees opinion on the preferred methods of dealing with the case. No meeting should be held in the absence of the affected employee. The affected employee should be allowed to express their feelings Upholding of employee rights- every employee has the right to seek justice when an offense is committed against the employee. The employee has the right to launch a complaint if the employee feels offended. This means that the employers should not interfere or try and intimidate the employee into not seeking justice. The employers should uphold the employees right against harassment (CA 2017) The procedures used in the selected conflict situation should offer a permanent solution which the employee is satisfied with. The procedures enabled the employee to advance to the highest level in search of justice. Effective conflict resolving procedures provide quick, fair, and transparent. The procedures used provided a quick solution since the time frame was observed and the affected employee was completely involved in the decision making process with the employees suggestions taken under consideration. Effectiveness of the Management Strategy: A good management strategy leads to increased labor productivity as well as improved sales. A good management system reflects a good manager. One quality that sets a manager apart from the rest of managers is the ability to spot something unique in all their employees and utilize that unique quality of the employee to the benefit of the company as well as for the benefit of the worker(Buckingham 2005). The managers in any organization should assign duties to employees that their skill set can be maximally utilized. A good management strategy strives to identify talent in the employees and also during recruitment. Effective management balances tasks and relationships and leads to better results that are long-lasting (Peck 2013). Woolworth's limited management strategy aims at achieving the companys objectives through empowering the employees. The success of the management strategy is valued by the outcomes. Some of the results of Woolworths li mited management strategy include; Improved labor productivity. - Labor productivity is crucial to the companys performance in terms of sales. Democratic managers seek inputs from the employees and consider the information while making decisions on improving the working conditions (III, 2017) . Involvement of employees in the areas that concern their work conditions motivates the worker. The workers will feel that their opinion matters and are motivated to work hard so as to contribute more to the company. The sales of Woolworth limited have been experiencing progressively each year at a fast rate than the rate of growth of sales of the competing companies. The workers have appreciated their involvement in decision making on matters that affect them. Their interactions with the management have been fruitful. The employees claim that they are inspired by the discussions they have with their managers. Workers claim that they understand the vision of the company and what is expected from them. They also admit that they f eel like they partly own the company because they are involved in decision making of major issues in the company. They appreciate having a voice to air out their opinions and that for that reason; they feel obliged to work to the potential. The employee motivation has led to increased labor productivity from the employees. Low cases of conflict. - Conflict happens often in a workplace. Employees may conflict among themselves or managers may conflict with the employees. When conflict occurs, the effect is usually low morale, employee absenteeism, and reduced productivity (Universuty of Oklahoma human resource, 2017). High conflict rate leads to the low performance of the employees and consequently the low performance of the company. The management strategy in the Woolworth limited company ensures that the conflict resolution system is effective. The human resource department at the company always treats any issues reported with the deserved attention. The company has an employee reconciliation process that ensures that the issue will not resurface once the dispute is settled. The rate of conflict occurrence in the company is significantly low. The culture of the company integrates the employees with the management and the company itself. Improved customer relationships. -The customer relationship management analyses the rate of customer interaction with the business. Customer relationship management is basically the practices and technologies that companies use to monitor, analyze and manage the customer interactions with the business(Rouse 2014). Customer relationships are important to retain customers and increase sales through attracting other customers. The customer relationship management system uses the companys website, telephones, live charts, email to assess the level at which the customers contact the company. The system gives details on the customer on their purchases and their personal information. Woolworth limited has experienced a significant rate of customer retention. Customer loyalty has been high in the company. Customers often praise the services at all the company outlets in the different sectors. The workers have quality service delivery skills. This has been attributed to the advice and constru ctive criticism they get from their supervisors and managers. The managers are involved in the daily activities of the business and have the chance to interact with the employees while working and can correct any mistakes and praise noted efforts. The employees, on the other hand, gain from the correction they receive from their seniors and with time they are almost flawless in their service delivery. Woolworths limited, however, is faced with certain issues; Some of the employees do not finish their tasks as a result of the friendly environment with the management The management strategy failed to involve punishment. The above two issues are the key issues facing the organization. To solve the issues the following steps should be taken; The management should learn how to be friendly to the workers while at the same time be firm enough so that no employee will leave any task undone The policies of the company should be amended to provide for punishment. This will instill accountability in the employees. Conclusion The management strategy at Woolworth limited is effective enough. The success of the company is attributed to the management and to the employee's conduct. The implementation of the strategy has been successful. The strategy is suitable for the company since it is large with many employees. The management of the company realizes that the company will perform well when the employees needs are addresse References Ade. "rockefeller habits." jell. 2017. https://jell.com/blog/master-rockefeller-habits/. Barker, Edward. "Leadership and Management-guiding principles, best practices and core attributes." journal of public health management, 2014: 356-357. Buckingham, Mrcus. "what great managers do." harvard business review. march 2005. https://hbr.org/2005/03/what-great-managers-do. CA, santa monica. "employee rights in common workplace issues." lawfirm. 2017. www.lawfirms.com/resources/employment/discrimination/employer-rights-common-workplace-issues.html. Doyle, Alison. "conflict resolutions list and examples." the balance. july 19, 2017. https://www.thebalance.com/conflict-resolutions-skills-2063739. guide, management study. "Role of Managers in employee relations." management study guide. 18 august, 2008. www.managementstudyguide.com/role-of-magers-in-employeerelations.html. III, George N. Root. "how does leadership style influence organizational productivity?" chron. 2017. smallbusiness.chron.com/leadership-style-influence-organizational-productivity-11643.html. M.Godess. ""The Typed Gold." december 2, 2010. yourpersonal researchwriter.blogspot.in/2010/12/unitary-and-pluralistic-perspective-of.html?m=1. MaRS. "strategy statement. Articulating your copetitive advantage, objectives, and scope." MaRS. december 6, 2013. https://www.marsadd.com/mars-library/strategy-statement-articulating-your-competitive-advantage-objectives-and-scope/. Omur Hakan Kuzu, Derya Ozihan. "the effects of employee relationships and knowledge sharing on employee performance:an emperical research on service industry." procedial-socila behavioral sciences 109 (janauary 2014): 1370-1374. Peck, Dvid. "huffpost." 5 ways to know if you are an efficient or effective leader. april 6, 2013. https://m.huffpost.com/us/entry/2606615. Ramsay, Doug. "is competition in the workplce good or bad?" adventure associates. August 13, 2015. https://www.adventureassoc.com/is competition -in-the-workplace-good-or-bad/. Ready, Kevin. "three management strategies you can use today for higher team perfomance." forbes. february 2, 2016. https://www.forbes.com. Rouse, Magaret. "customer relationship management." searchCRM. november 2014. search.techtarget.com/defination/CRM. Shukla, Amitabh. "competition at workplace-advantages and disadvantages of competition." paggu.com. august 27, 2009. www.paggu.com/jobs-and-career/competiton-at-workplace-advantages-and-disadvantages-of-competition/. University of Oklahoma human resource. "resolving conflict at work:employee information." university of Okalhama human resource. august 8, 2017. https://hr.ou/employee/career-development/resolving-conflicts-at-work. Whitmore, J. (2015). "7 elements of a strong work ethic." ENTREPRENEUR. SEPTEMBER 1, 2015. www.entrepreneur.com/slideshow/299488

Wide Sargasso Sea and Antoinette free essay sample

In Wide Sargasso Sea, author Jean Rhys uses intertextuality to tell the story of Antoinette Mason. Intertexuality is when an author bases their book/novel off of another text. In this case, Wide Sargasso Sea is shaped from Charlotte Bronte’s Jane Eyre and it elaborates on the character of Bertha, who is Antoinette Mason in Rhys’ novel. By reading Wide Sargasso Sea we are enlightened on things in Jane Eyre that Bronte does not tell us about or elaborate on. Also, by reading Jane Eyre we understand things about Wide Sargasso Sea that Rhys doesn’t include in her novel. Both authors have created compelling novels that aren’t built from each other and provides a deeper understanding of one another. Rhys is quoted saying â€Å"Whether I have any right to do it is a question I’ll face later† (217). When examining the texts, it is apparent that she is not stealing or attempting to take credit for Jane Eyre. We will write a custom essay sample on Wide Sargasso Sea and Antoinette or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Yet she is only telling it from Rochester’s crazy wife, Antoinette/ Bertha’s perspective. I feel that she has every right to do this because she is molding a story of her own based on a minor character whose story is never told. Whether the two stories could exist without the other is another question. Jane Eyre is an interesting story that creates suspense and mystery, but provides closure at the end. We are left to wonder about Rochester’s past up until the story is almost over. We come to find out the he was married to Antoinette, a lunatic whom he locked up in a room with only Grace Poole to watch over her. It is assumed that how Rochester’s marriage came to be was something Bronte wanted the reader to wonder about, and even make up circumstances on their own. Jane Eyre is an excellent novel that has no problem standing on its own. Wide Sargasso Sea is a story about the life of one of Bronte’s characters in Jane Eyre who plays a brief role but is crucial to the story. Antoinette lived a very underprivileged life growing up. Her family situation and her social situation shaped her into the character we know her as today. From the story of her life we get a better understanding of her role as a character in Jane Eyre and perhaps most of the mystery we have is cleared up. Wide Sargasso Sea is a very creative literary piece that provides depth to a character whose story would have gone untold. After reading Wide Sargasso Sea we have a better understanding of Jane Eyre and some of the events that took place within the novel. We find more out about Rochester’s dark past; Bronte just didn’t go far enough back to enlighten us on his marriage. After reading Rhys’s Wide Sargasso Sea we now know how Rochester and Antoinette’s relationship came to be. Their marriage was arranged so that Rochester would have financial stability because he was the second son and was likely to not inherit anything from his father. Rochester felt he was duped into marrying Antoinette by his father and everyone else. In one scene Rochester says, â€Å"As I walked I remembered my father’s face and his thin lips, my brother’s round conceited eyes. They knew. And Richard the fool, he knew too†¦They all knew. †(Rhys 62). He thinks everyone knew Antoinette was crazy but didn’t tell him. Rochester seems to be ashamed with himself over locking Antoinette in the attic, but he feels like it was the right thing for him to do. He would have had a miserable life and also would have put everyone in danger at Thornfield, with crazy Antoinette around. Antoinette was a lunatic and if Rochester had to put up with her psychotic antics, he likely would have gone crazy himself. The feelings that Rochester has for Jane are almost new to him. He did not marry Antoinette because he was in love with her. After reading Wide Sargasso Sea we see why Rochester was so glad to find someone like Jane. He didn’t really have anyone to talk to or a companion for the longest time. Before Jane came to Thornfield, Rochester would go away for many months at a time just to escape the terror of what he had locked up at home. When Jane was there, Rochester did not have any reason to go away because he was content with the situation at home and his feelings for Jane. One night Rochester and Jane are by the fire and Rochester says, â€Å"I knew†¦you would do me good in some way, at some time: I saw it in your eyes when I first beheld you†¦Ã¢â‚¬  (Bronte 129). This quote shows that Rochester has real feelings for Jane. Without the knowledge from Wide Sargasso Sea we would not understand why Rochester was so happy when Jane was there, or what had caused his unrest in the past. In Jane Eyre we see the character of Grace Poole as being very strange and eerie. She operates mostly on her own, staying quiet and often looking very mysterious. Jane believes that Grace is the one that lights Rochester’s bed on fire. Little does Jane know that Grace is hiding the person that attempts to take Rochester’s life. Grace is paid double her salary to be the caretaker of Antoinette. She was paid that so she would not let the other servants or anyone in town in on the secret. In Jane Eyre we don’t know what Grace Poole does until the very end, so she ends up being depicted as a villain throughout the novel. After reading Wide Sargasso Sea we have a better understanding of the events and characters in Jane Eyre. In Caroline Rody’s criticism of Wide Sargasso Sea she explains, â€Å"Strikingly, Rochester remains completely nameless throughout. Called only â€Å"the man,† â€Å"he,† â€Å"husband,†Ã¢â‚¬ ¦this speaker is given no body—no physical description whatsoever† (Rody 219). Without any previous knowledge of Jane Eyre we wouldn’t know that Antoinette’s husband’s name is Rochester. We see that Rochester isn’t as bad of a man as we suspected him to be throughout Jane Eyre, he just had some serious misfortune. These two novels are excellent in their own regard. I feel as though they both should be read in order to get the fullest understanding of each. Both works fill in gaps that would have been left unknown if they had to stand on their own. Jane Eyre and Wide Sargasso Sea are prime examples of how intertextuality can be fulfilling and provide a greater understanding of two pieces of literature.