The relationship between Corporate Social Responsibility (CSR) strategy and earning management by companies
CSR is certainly related to Business Ethics. As far as earnings are concerned, they increase if CSR is aligned to Business Strategy.
CSR should be core objective every business. Earnings management might be a part of CSR as it stable the business earnings and reduce the risk of company.
CSR cannot be core objective for every business though it could be so for social enterprises where social objectives override economic objectives.
Ethics should be a before-profit/earnings concern (Key and Popkin, 1998). The following papers should also be helpful to your topic.
- Falck, O. and Heblich, S. (2007). Corporate social responsibility: Doing well by doing good. Business Horizons, 50, 3, pp. 247-254.
- Friedman, M. (1970). The social responsibility of business is to increase its profits. New York Times Magazine, 13 September 1970.
- Key, S. and Popkin, S., J. (1998). Integrating ethics into the strategic management process: doing well by doing good. Management Decision, 36, 5, pp. 331-349.
- Kim, Y., Park, M. S. and Wier, B. (2012). Is earnings quality associated with corporate social responsibility? The Accounting Review, 87, 3, pp. 761-796.
- Prior, D., Surroca, J. and Tribó, J. A. (2008). Are socially responsible managers really ethical? Exploring the relationship between earnings management and corporate social responsibility. Corporate Governance: An International Review, 16, 3, pp. 160-177.
Sustainability is THE approach, CSR is only a part of it.
There must be a balance between earning management, social and environmental aspects of business activities.
Yes, business ethics includes not only financial and short terms goals, but nonfinancial (social & environmental) and long term goals as well.
It is holistic perspective, paradigm.
Sustainable value is what we need.
Economy of soul is what we need.
CSR can be a strategic decision that is tied to ethics, corporate government, and corporate reputation. Earnings management could also be related as well.
McGunagle, D.M. and Button, D.K. (2014) Communicating corporate social responsibility to maximize profits. Journal of Strategic and International Studies, 9(5),
McGunagle, D.M. Button, D.K. & Zizka, L. (2016) The impact of corporate social responsibility communications on corporate reputation. I-Manager’s Journal of Management, 10(4) 37-44.
Kindly have look at the attached article for your purpose.
Article Impacts of "Organizational management's tasks" on "Making th...
One rhing is for sure, if you don't earn you cannot do any CSR. Go through attached articles.
Thanks for your response and views all. I will appreciate it however we need to look deeply about Companies strategy cause there a lot of probability for Companies use CSR as tool to them make benefit on the other ways. Earning management is negative impact for business ethics however legal actions. Please look the question as topics discussion not just only general question. I or we need your opinions rather than answer the question. Thanks and keep in touch.
Will you please let me know your research objectives and specific research question so that concrete suggestions could be given.
This is general discussion and I have given objective and target about this case thanks
Based on my work experience as audit committee in a public company, I do not see that earnings management related to CSR strategy. I think firms commonly do EM just to manage their performance, but I agree that CSR is merely used as a strategy for building reputation especially when it used a political tool.
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