THE CORPORATE SOCIAL PERFORMANCE-FINANCIAL PERFORMANCE LINK

Strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them. Recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with soc...

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Bibliographic Details
Published in:Strategic management journal 1997-04, Vol.18 (4), p.303-319
Main Authors: WADDOCK, SANDRA A., GRAVES, SAMUEL B.
Format: Article
Language:English
Subjects:
Biological and medical sciences
Business structures
Civil penalties
Community relations
corporate social performance
Corporate strategies
Correlation analysis
Finance
Financial management
Financial performance
Financial services industries
Fundamental and applied biological sciences. Psychology
Hypotheses
Investment strategies
Management principles
management quality
Managers
Miscellaneous
Occupational psychology
Psychology. Psychoanalysis. Psychiatry
Psychology. Psychophysiology
Social responsibility
Strategic management
Studies
Working women
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Summary:Strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them. Recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management, rather than traditional arenas of strategic management. Using a greatly improved source of data on corporate social performance, this paper reports the results of a rigorous study of the empirical linkages between financial and social performance. Corporate social performance (CSP) is found to be positively associated with prior financial performance, supporting the theory that slack resource availability and CSP are positively related. CSP is also found to be positively associated with future financial performance, supporting the theory that good management and CSP are positively related.
ISSN:0143-2095
1097-0266
DOI:10.1002/(SICI)1097-0266(199704)18:4<303::AID-SMJ869>3.0.CO;2-G