Enhancement Factors on Corporate Social Responsibility (CSR) Activities Based on Stakeholder Relationship Improvement and Business Performance

Abstract

The purpose of this paper is to identify that organizational capabilities affecting CSR and to ascertain whether CSR influences MNC’ business performance or not using the framework of structural equation modeling known as PLS. Drawing on the stakeholder theory for the driver’s perspective, this study hypothesizes that relationship capability, shared vision, internationalization experience are positively related to CSR. Data were obtained through a survey sent to headquarters of Korean multinational corporations(MNCs) publicly listed in the Korean Stock Exchange in April 2017. The results suggest that all variables are mostly related to CSR significantly. Furthermore, results show that CSR influences MNC’ business performance positively and also that. CSR activities improve business performance. This implies that this is a reason for firms to continuously implement voluntary CSR activities. Therefore, this study agrees with the findings of other researchers affirming that CSR positively influences firm’ business performance primarily by increasing the satisfaction of core stakeholders. In addition, the more active the firm is in CSR activities, the less level of conflict of interest exists among the shareholders and the other stakeholders of the firm. Finally, this study suggests that the voluntary CSR activities may increase the value of the firm and that of the shakeholders at the same time.