Ownership Issues In Csr

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Title Introduction Statement of the problems (include definition of CSR, ownership structures) Under different ownership structures, whether there is relationship between financial performance and corporate social responsibility and whether there is difference? 2.If we find a difference under different ownership structures, this may be due to Agency problem? (Reasons behind) Agency Theory Agency theory is concern about the relationship between principal and agent. It describes the conflict between board of directors and shareholders that happen when board of directors choose actions that are not in the best interest of shareholders and aim at maximizing their own utility. The managers who have superior knowledge and authorities to run…show more content…
Consequently, financial performance would be the cost of CSR. As investments in CSR can provide extra benefits to managers that would not be normally exist from a typical investment, for example, reputation and social status, this may results in over-investment in CSR. In addition, the agency problems could be minimized by providing commissions, profit-sharing and other incentives such as bonds and company shares to the managers. Stakeholder Theory Stakeholder theory is about organizational management and business ethics which addresses morals and values in managing an organization. This theory is to try to do good things and satisfy the stakeholder’s needs. The company try to reward not only for internal parties in organizational but for the external parties. CSR activities will give good impact to internal parties. The company will motivate employees to enhance their skill in perform their job by the implementation of CSR in the workplace. Therefore this can give effect for the company reputation thus it can give good impact to financial performance. Objectives of study 1. We choose family ownership and managerial ownership for comparision. 2.…show more content…
As CSR is an evolving concept enterprises are likely to fulfill their CSR obligations with a positive financial impact. The profit-motivated CSR theories argue that CSR can be an economically justified business expenditure that enhances a firm’s future financial performance. For example, CSR can enhance future financial performance by creating better image to consumers which can increases demand for products, attracting higher quality and talented employees, reducing conflicts among stakeholders, signaling product quality, improving corporate reputation, or the income spent on special purposes. However, some people argue that the responsibility of a corporation is to earn profits and that CSR is the expense from shareholder for pursuit of managers’ own interests.
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