The contribution of corporate social responsibility to achieving competitive advantage and improving the financial performance of institutions
Keywords:
corporate social responsibility, CSR, institutions, competitive advantage, financial performanceAbstract
This paper aims to investigate whether corporate social responsibility (CSR) can help institutions achieve a competitive advantage and improve their financial performance. A descriptive approach was employed to define related concepts, alongside a review of previous research utilising various tools and yielding different results. The study concluded that CSR enhances an institution’s image in society and increases its market share. When linked to its core activities and strategies aimed at meeting social and environmental needs, as well as the interests of institutions, CSR can contribute to the competitive advantages of an institution both directly and indirectly. This involves maintaining relationships with stakeholders. Furthermore, CSR improves an institution’s financial performance by enhancing accounting returns, though it does not necessarily improve market returns. The study recommends that institutions should not merely view CSR as a tool or cost, but rather as an opportunity to be leveraged for significant gains. They should also pay more attention to the environmental aspect of CSR, avoiding a greedy pursuit of profit at the expense of social and environmental issues, since financial performance can be achieved through the adoption of CSR practices.
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