Finance & Accounting

Is Corporate Social Responsibility Good For Profits

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Assessment Type


Word Count

200 words


Business Ethics


1 Day

Assignment Criteria

Assessment Description

This assessment requires students to construct an annotated bibliography on ONE of the topics listed  below. The topic you choose will also be used in Assessment 2, the individual essay.

  • Is whistleblowing ethical?  
  • Is corporate social responsibility good for profits?  
  • Is bribery acceptable under some circumstances? 
  • Why do 'good' managers sometimes make bad ethical choices?  
  • Is 'going green' ethical or just a business fad?  

TIP: Before  making  your  final  choice  of  topic  why  not  undertake  a  quick  search  of  the  academic  literature on each of the topics using the Kaplan on-line databases such as Athens, Emerald, ProQuest  and Business Source?  


An  annotated  bibliography  is  'a  list  of  sources  on  a  topic  by  many  authors,  collected  to  form  the  knowledge on that topic' (Hart 2001).  Your annotated bibliography should provide a brief account of at  least five academic articles on your chosen topic. Its purpose is to inform yourself about the topic and  its ethical dimensions whilst at  the same  time developing your academic skills of literature searching  and review: these are generic skills which will serve you well in other subjects.  

Structurally,  an  annotated  bibliography  comprises  of  a  list  of  sources  known  as  ‘citations’  and  formatted in Harvard referencing style. In this assessment your sources (citations) need to be academic journal articles and NOT  text-books  or  popular  sources  such as  newspapers, magazines  or web-sites  like Wikipedia. 

Each  entry  in  an  annotated  bibliography  consists  of  a  citation  followed  by  a  few  short  review  paragraphs; these paragraphs are the 'annotations' and should be a concise description, analysis and  evaluation of  the article cited. The  review should be original;  that is, written in your own words and  not copied and pasted from the article or anywhere else. 


  • An  example  of  an  annotated  bibliography  is  available  for  students  to  download  from the Portal.  
  • Whilst  lecturers  will  offer  some  in-class  facilitation  on  literature  searching  skills,  students are expected to engage with the on-line databases in order to find relevant  academic journal articles.  
  • Also,  an  ASC  Academic  Skills  Adviser  is  available  for  consultation  on  campus  during  most weekdays to help you develop your literature searching and review skills. 

Constructing an annotated bibliography may appear to be a very different type of assessment if you’ve  not done one before. However, if you start early and act on the resources made available, then you’ll  find the process is less time-consuming and quite straightforward.  

IMPORTANT:  Whilst  your  annotated  bibliography  is  a  stand-alone  assessment,  it  has  a  second  instrumental  value as its articles  can  be  used  to inform your Assessment  2 essay  (see  page  6).  So, a  well-written annotated bibliography will also give you a good start to your Assessment 2 essay!

Your annotated bibliography should contain a minimum of five citations with reviews. The age

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Assignment Solution

Whether corporate social responsibility is profitable for organizations or not, is a debated topic with a large body of theoretical as well as empirical academic literature. In this review, however, I will try to focus on empirical papers to make an empirical case for the debate.  

Balabanis, G., Phillips, H., C., Lyall, J., 1998, 'Corporate social responsibility and economic performance in top British Companies: are they linked?', European Business Review, Vol. 98, No. 1, pp. 25 ̶ 44.

Description: This paper is one of the prominent ones investigating the causal relationship between corporate social responsibility (CSR) and economic performances in 56 large UK companies, to provide an empirical basis for theories. The CSR performance and disclosure data used in the analysis was compiled by the New Consumer Group. This data set consisits past, concurrent, and subsequent CSR performances of those companies. Both financial as well as capital market performances are considered as constituting the economic performances of those companies. 

Result: The primary result confirms the link between economics performances of those firms and their CSR performance and disclosure. The strength and type of the link, however, is not consistent throughout the study. Like, the past economic performance seems to strongly influence organization's tendency to invest in CSR. Similarly, CSR disclosure was found positively linked with organizations' CSR performance and concurrent economic performance. Another important finding is that donations to Conservative Party as part of CSR activity, seems to be unrelated to economic performance.  

Evaluation: As already articulated, this paper is one of the pioneer papers in this literature. This work seems quite comprehensive in terms of focusing on economies other than the United States. Although attempted, the hypothesis of 'ethical investor' could not be empirically verified by this paper.  

Tsoutsoura, M., 2004, 'Corporate Social Responsibility and Financial Performance', Working paper Series, Paper 7, University of California, Berkley. Retrieved August 29, 2015 from 

Description: This paper tries to address the debate on whether firms should focus blindly on profit maximization or they also have social responsibilities, through an empirical investigation on firms of the US. Five years extensive data on financial performance and corporate social responsibility of most of the 'S&P 500 firms' was employed for the analysis. After appropriate coding, cross-sectional time series regression analysis is carried on the collected data for those firms. 

Result: The primary result obtained demonstrates that there exist a statistically significant positive relationship between economic performance and CSR. Or in other words, investment in CSR activities can actually improve the financial performance of those firms. The theoretical explanations behind these empirical facts are also highlighted. The first one is that economically strong firms would actually have the necessary financial capacity to invest on CSR activities. The second one is that CSR investment demonstrates proactive management and thus helps the firm to achieve the trust of important stakeholders, resulting economic gains.

Evaluation: The use of large cross-sectional data points is one of the distinct features of the paper. The paper also adds on to that large body of empirical research focusing solely on the US. The attempt to go beyond the empirical findings to theoretical underpinnings is really a new attempt in this kind of paper. 

Lev, B., Petrovits, C., Radhakrishnan, S., 2010, 'Is doing Good Good for you? Yes, Charitable Contributions Enhance Revenue Growth' Working paper, New York University Stern School of Business. Retrieved August 29, 2015 from 

Description: This study is a novel attempt, in terms of going between correlation to causality, to answer the question whether corporate philanthropic contributions, not other CSR activities actually adds to their financial gains or they are just a drain of losing corporate money, in the context of US firms. This study used a large data set on charitable contributions made by corporations over the 12 years period of 1989 to 2000. The final sample consists of 1618 observations for 251 firms. To find the causal link, this paper uses Granger Causality test. 

Result: This paper establishes a causal relationship between corporate contributions and future sales growth of donor firms. More specifically, corporate charitable contributions do enhance revenues in 'consumer sectors'. However, where the customers are not individual, contributions don't seem to have much effect on the sales growth. The paper also examines the role of managerial quality and concludes that it does not significantly influence the relationship between corporate contributions and growth in sales. The paper finally concludes that the possibility of 'virtuous circle' or simultaneous relationship between social contributions and sales can be completely ruled out. 

Evaluation: This paper clearly distinguishes between correlation and casual link. And can be considered as one of the pioneer examples of establishing the later. Along with this, the data set used does have a large spread as well as depth. However, this paper also seems to be restricted to US scenario. 

Lev, B., Petrovits, C., Radhakrishnan, S., 2010, 'Is doing Good Good for you? How Corporate Charitable Contributions Enhance Revenue Growth', Strategic Management Journal, Vol. 31, pp. 182 ̶ 200.

Description: This one is just a follow-up paper to the earlier one. In the last one, the authors stopped at the level of establishing the causal relationship with the help of Granger Causality Test. This one goes towards explaining how that causal relationship is possible. The empirical basis used in this paper is completely identical to the earlier one and thus not discussed in detail. 

Result: In terms of explaining the obtained result, two main explanations are tested. The first one is that public perceptions should moderate the relationships between contributions and sales. The finding is the decreasing marginal return to philanthropy. The second one tested is whether customer satisfaction influences the established relationship between contributions and sales. The result provides an affirmative conclusion to this second hypothesis. 

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