Impact of Corporate Social Responsibility (CSR) Implementation on The Profitability of State-Owned Enterprises: An Analysis of 20 Listed Companies in Indonesia

Febrizal Rahmana

doi:10.32924/ijbs.v1i2.21

Abstract

The purpose ofthis research is to prove that State-Owned Enterprises (SOEs) that invest in CSR will optimize proit in the hope that thesatisfaction of stakeholders is reached effectively. This paper is a quantitative analysis of an exploratory approach. Discusses theimplementation of CSR from 20 state-owned companies is go public companies. This analysis is based on the Global Reporting Initiativereport which provides some aspects of sustainability.The reports were taken from the availability both CSR and inancial data.The nextstep is to look at the EPS trend of these SOEs and comparing to those aspects are applied. The restrictions coverage of this paper is only for20 state-owned companies which listed in Indonesia.In this research proves that the implementation ofCSR has not yet become the burdenofSOEs but can also give the proit growth ofthose SOEs. Where there is a positive relationship between the implementation of CSR and theEarning Per Share (EPS) with coeficient correlation (R) is 0.110, even the tendency ofincreasingly integrated CSR programs grow the proitof SOEs. There is the theoretical implication to management science that the implementation of CSR is not a burdening cost but is aninvestment and CSR is one ofmany ways for companies to increase business competitiveness in the present era. Also, there is themanagerial implication that by implementation CSR is very important to have a mutual beneit between society and corporation while SOEsstill can optimize some proit. This understanding is essential as a high concentration in social and corporate relations in modern times.

Highlights

Corporate social responsibility (CSR) has become the point of interest for business practice
Lin (2014) as follows: a) planning some strategies based on the vision and mission of the company; b) implementing of the strategies based on ethics, laws, and regulations; c) predicting the economic, social, environmental impacts; d) conducting multilateral cooperation, governments, NGOs, involving all of stakeholders, in implementing Corporate Social Responsibility (CSR) for sustainability
The identi ication the data on aspects of CSR implementation of 20 State Owned Enterprises (SOEs) going public based on Global Reporting Initiative (GRI) guidelines as follows: From the table 2, there are two classi ications based on CSR implementations: complete and not complete

Summary

Introduction

Corporate social responsibility (CSR) has become the point of interest for business practice. The concern to the social and environmental impact of the business drives the companies to another issue: sustainability (Crosbie & Knight, 1995). CSR implementation as an embodiment of sustainability of the company, the company's management must have the capability in the form of reliable leadership skills to steer and drive the company in achieving its vision and mission as stated by Hiriyappa (2009: 134). A company must have the intention to deliver a strategic role, as presented by C.W. Lin (2014) as follows: a) planning some strategies based on the vision and mission of the company; b) implementing of the strategies based on ethics, laws, and regulations; c) predicting the economic, social, environmental impacts; d) conducting multilateral cooperation, governments, NGOs, involving all of stakeholders, in implementing CSR for sustainability

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