Does corporate social responsibility influence profit margins? a case study of executive perceptions

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ABSTRACT

The literature on the business case for Corporate Social Responsibility (CSR) has identified possible mechanisms for CSR to increase profits. Other parts of the CSR literature argue that any strategy yielding above-average profits will be imitated by competitors and profits driven down to industry average; consequently, CSR may only be a strategy for achieving average profits. The empirical research on the relationship between CSR and profits, consisting mostly of quantitative studies, has thus far proved inconclusive and many studies are challenged on methodological grounds. This paper presents the results of interviews with senior executives of 15 of the largest textile companies on the Norwegian market. The aim of the paper is to investigate the relationship between CSR and profits while avoiding the most important methodological pitfalls of the quantitative research and acknowledging the distinction between CSR as a strategy for achieving average profits and as a strategy for achieving above-average profits. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.

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