Connection between Theory and Practice of Corporate Social Responsibility
Connection between Theory and Practice of Corporate Social Responsibility

Summary/Abstract: Our goal is to identify the connection between theory and practice in Corporate Social Responsibility (CSR). The method is based on the analysis of scientific and professional publications − journals, books, relevant databases and practical business knowledge in order to reach conclusion on this topic. The CSR concept is directly connected with the ethical foundations of each organization. It shows necessity of organizational work in society, through corporative philosophy which must take into consideration internal stakeholders as well as external stakeholders. It is evident that CSR is indispensable for corporations in order to demonstrate their ethical standards in practice to the general public. Accordingly, corporations build an image of the organization that does not only bring profit, but also has obligations towards environment and society in general. The role of corporations in society is important. In the 20th century, companies already had standards to ensure human working conditions: to provide health care program, housing as well as to donate to charities, but these actions were not defined by the term Social Responsibility. However, in the 21st century due to the growing need for operational competitive performance, customer satisfaction and environmental problems, the term CSR comprehensively, coherently and professionally summarizes an approach that underlines social responsibility of corporations nowadays. Finally, when comparing major competitors across several industries we find a weak link between environmental, social and governance (ESG) indicators and selected financial ratios.

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