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Abstract
responsibilities on firm financial performance. It draws from the corporate social responsibility
the correlation between the investment in corporate social responsibility and effect of firm
financial performance. The information shall be collected using the questionnaires from
customers, staffs of nestle UK (Halifax) and stakeholders. The three mentioned respondent are
considered important to our research since, they form the main pillars of evaluating the
corporate social responsibility to investment by the company. Will use the information together
with the information from the annual reports to make an analysis of the effect of corporate
social responsibility on firm financial performance and afterwards, provides conclusion and
Currently, CSR has turn to be a significant area of modern corporate study theorem, and the
development of corporate social responsibility activities all over the world is notable. Whilst the
association between corporate social responsibility and corporate financial performance is still
program that are incorporated throughout the business operations as well as verdict making
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Table of contents
CHAPTER ONE..............................................................................................................................9
INTRODUCTION.......................................................................................................................9
BACKGROUND INFORMATION.............................................................................................9
Research objectives....................................................................................................................15
Research questions.....................................................................................................................16
CHAPTER TWO...........................................................................................................................20
LITERATURE REVIEW...........................................................................................................20
2.0 INTRODUCTION...............................................................................................................20
Competitiveness:....................................................................................................................24
Differentiation:.......................................................................................................................24
Cost reduction:.......................................................................................................................25
Ethical responsibility:.............................................................................................................28
Philanthropic responsibility:...................................................................................................28
Agency perspective:...............................................................................................................36
Stakeholder perspective:.........................................................................................................36
RESEARCH METHODOLOGY...............................................................................................43
3.1 INTRODUCTION...............................................................................................................43
Tables......................................................................................................................................48
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Percentages.............................................................................................................................49
.......................................................................................................................................................49
Sampling Design...........................................................................................................................49
CHAPTER FOUR.........................................................................................................................52
4.1 INTRODUCTION...............................................................................................................52
Descriptive statistics:..............................................................................................................52
Descriptive statistics...............................................................................................................65
Section c:....................................................................................................................................68
5.0 INTRODUCTIONS:............................................................................................................75
Other benefits nestle derives from corporate social responsibility - value creation.............76
5.2 conclusion................................................................................................................................76
Reference list.................................................................................................................................86
ABBREVIATIONS......................................................................................................................108
CHAPTER ONE
INTRODUCTION
BACKGROUND INFORMATION
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Corporate social responsibilities (CSR) is a theory entailing the practice in which companies on a
voluntary basis integrate the social and environment uplifts in their daily business policy as well
as operations. A company is mainly incorporated to create value by providing goods and services
that the community needs. The current idea of corporate social responsibility means that
companies incorporate social and environment concern in their operations and association with
stakeholders. The idea of corporate social responsibility is the main moral concern revolving
around company’s verdicts and attitude hence where a business must undertake specific activities
or desist from doing it since they are advantageous or destructive to the community is the main
question. Social matters consider ethical deliberation of their own as well as must lead
executives to deem social impact of company’s activities in decision making (Argandoña, 2008).
At present, executives of multinational corporations (MNC) have realized that need that the
environment in which they do business be provided for since their intermediary as well as macro
environment depict direct impact on achievement of company’s objectives as well as its mission
statement. The aim of all profit making companies, as well as even non-profit making
organization, is to maximize profits as well as minimize cost by way of optimal usage of existing
resources to attain the utmost outcome they are in capacity of doing. Profitability is a significant
factor to entire multinational corporations since; it is the main reasons for which they are
Corporate social responsibility entails a company recognizing groups as well as integrating their
requirements and values within the plans and daily verdicts process, hence a means of examining
in the inter-dependent association that exist between business, the economic system as well as
the societies within which they operate. Corporate social responsibility is an alternative of
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discussing the extent to commitment a company has to its intermediaries community, an
approach of recommending policies on the manner to which commitment may be met and also
tools by which the advantage of a business for comply with its commitments might be identified.
community relations. It entails tan approach in which a company makes business verdicts,
products and services provisions, and their efforts to attain an open as well as authentic
philosophy. the association with their workers, customers as well as key stakeholders with
responsibility varies from response to market forces, globalization, consumer and civil society’s
The activities of the company are as result noticeable due to their global reach. In this regards,
there is high inducement to safeguard their brand as well as venture through corporate social
responsibility. The corporate social responsibilities activities in this sector are the mostly
centered on remedy the impact of their business operations on the community. Hence the
company that operates in these sectors frequently provides corporate social responsibility
Aras and Crowther (2008) mentioned that the multinational corporations undertake corporate
social responsibility in order to meet their financial objectives, social as well as environmental
accountabilities. At its core, it’s just about having a set of values as well as attitude that reinforce
its daily activities, accountabilities, the need for fair transaction, consideration for the society, its
behavior on customer’s services as well as its association with the community. in this regards, the
the environmental consequences of the company’s business operations, products and facility,
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getting rid of waste and emission, capitalizing on effectiveness and productivity of its resources,
reward for externalities and tom reduce unscrupulous practices that may unfavorably affect the
pleasure of the nation’s resources by future generation. in the developing worldwide economy, in
which the internet, the news media as well as the information uprising shed light on business
practice globally, corporations are often adjudicated based on the their environmental
stewardship . Associates in business as well as consumers need to understand what is within the
company. This accountability of business practice implies that for multinational corporations,
b) The duties of the company in association with the government and the world.
c) Business performance as an accountable member of the community that it operate and the
worldwide society.
The first point of view entails the guarantee on good corporate practices, product accountability,
jobs station, right of employees training and education. The second entails the corporate
which guarantee that the state might work efficiently. The third point of view is multi-layered as
well as might entail the company’s association with individual as well as environment in the
societies that it operates, and those that it does business with. Too frequent, achieving corporate
social responsibility is comprehended from the point of view of business kindness to society
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programs as well as benevolent contribution, but this fails to consider the most treasured
advantages. Instead, it is perceived as a detailed set of policies, practice as well as program that
are incorporated throughout the business operation s as well as verdict making process that is
aided and rewarded by top executives. Many firm s have found corporate social responsibility
to depict positive impact on the company’s profits. of the topics linked to corporate social
responsibility , it is environmental resourcefulness that have generated, so far, the greatest value
of measurable data connecting pre-emptive firms with positive financial outcome. Corporate
social responsibility in a fast moving consumer goods (fact) industry might be focused on the
individuality of the socio-economic development challenge of the nations such as the health care
This may not appropriately depict the popular standards or expectation of corporate social
climate change, social accountability and many more due to effect of economic crisis. Firms are
presumed to be socially accountable due to the fact they anticipate an advantage from the
actions. For instance the advantage may entail the reputation improvement, the capacity to
charge optimum price for the output or the usage of corporate social responsibility to recruit as
well as upheld quality employees. the benefits are considered to offset the high cost linked with
the corporate social responsibility because, the resource need to be allocated to permit the
company to attain the corporate social responsibility objectives whilst the main indicator to
establish the true value if the 21st companies is their capacity to give back to the society part of
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the income by way of mutual advantageous inducement. there are no doubt that corporate social
environment as community needs are making it vital for the companies to be keen to trendy in
their environment, which guarantees more comprehension as well as good associations between
the company and the community they operate in because, corporate social responsibility
Research objectives
The main aim of the study is to examine the impact of corporate social responsibility of nestle
UK (Halifax) on its profitability. But precisely, the research pursues to attain the following
objectives:
.To find out how a company undertake corporate social responsibility as the main associates in
.To understand the challenges facing a company in undertaking the corporate social
of depositors’ funds.
Research questions
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well as to be an important material for academics dissertation in management science concerning
corporate social responsibility. The research will provide information on the impact of corporate
social responsibility on firm’s financial performance in UK’s FMCG industry. Finally, the study
work will provide information on the encounters of the corporate social responsibilities in the
The association between the corporate social responsibility and firm financial performance has
been documented in the literature to date. Preferably, corporate social responsibility and firm
financial performance must depict strong positive correlation, but research on corporate social
responsibility and financial performance have yield mixed outcome. These are research that
summarized that the inconsistent outcome of the past research reporting positive, negative or
McWilliams and Siegel (2000), a relationship between the research of the association between
the social and financial management for venture in research and development are significant
positive impact on firm financial performance(Crane, 2008). Also, the correlation between the
social and financial performance depict a strong correlation (Cochran and wood, 1984). The
involvement since it turns to be more social goods, beyond the interest of the company and that
accountability for the firm’s actions as well as motivate a positive impact by way of activities on
environment , consumer, workers, society, stakeholders as well as other members of the public
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The term corporate social responsibility turned to be famous in the 1950s and has remained a
term employed extensively by many to cover legal as well as ethical accountability, more closely
because of strong standards, standards as well as the appeal systems that are weak in the
developing nations (Demmerling, 2014). This weak standard makes its more challenging to
companies that practice corporate social responsibilities. Even though wide studies on corporate
social responsibility impacting the firm financial performance has been performed in developed
nations, there is still a scarcity of such research in developing countries. The research therefore
considers filling the gap between the researches on impact of corporate social responsibility of
The primary data used was collected from questionnaires form the respondent at nestle UK
(Halifax), the consumers, nestles business partners (external stakeholders) and the consumers of
the Nestle UK (Halifax) products. The research population is very large and thus 100
respondent’s form the top level, middle and lower level management were considered
appropriate for the study on the basis of stratified sampling made. this cuts across many division
in the company such as customers survives department, corporate affairs, retails division
market , finance division and other areas that was considered appropriate for the study. 145
customers were chosen by way of random sample. Lastly, five business associates of nestle UK
(Halifax) were interviewed by overseeing sample structured questionnaires for their response in
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Organization of the work
The research is planned and presented in five chapters. Chapter one focus on background
information of the research, aims of the research, the research questions, implication of the
research and also the limitation of the research. Chapter of the study entails the literature review.
The review encompass books, appears, publications of previous writers on same topic. Chapter
three focuses on evaluation of nestle UK (Halifax) and their business operations. It explains on
the approach of gathering data into details. Chapter four asses as well as discuss the data
gathered for the research. Lastly, chapter five discuss the findings, conclusion as well as
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CHAPTER TWO
LITERATURE REVIEW
2.0 INTRODUCTION
Nowadays, with globalization and growing competition between organizations in the world,
these combined factors are leading companies to become more serious towards environmental
and societal matters. Businesses in different industries are getting more consideration for
corporate social responsibility in terms of providing product and services for society during the
last couple of decades. Several organizations started reporting in relation of their ethical, social
and environmental behavior. The concept of corporate social responsibility has turned into a
subject of interest as well. Numerous studies examine the relation between corporate social
responsibility and firm financial performance (Filho, 2008). Many hypothetical perspectives on
the link in the middle of financial and social performance are put forward. Moreover, a lot of
empirical studies investigate the relationship between corporate social responsibility and
financial performance.
There are diverse opinions about the relation between social and financial performance with the
company, as well as the empirical research has not reached at the consensus. Some arguments
argued that corporate social responsibility imposes additional costs and that will affect the
financial firm position negatively (Friedman, 1970). Other viewpoints support Friedman opinion
that corporate social responsibility activities might conflict with firm value maximization.
However, corporate social responsibility activities also could be effective resources for creating
a well reputation which positively affect the long-term firm financial performance (Freeman,
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2010). Therefore, it is still uncertain how social conducts impact the value of firm financial
performance, also it is necessary to address this gap since corporate social responsibility phases
might create different observations between stakeholders and ultimately impact the financial
performance differently. This research will includes different meaning of corporate social
responsibility and particular social importance, types, theories in order to show how its affect the
Numerous corporate social responsibility definitions were produced by the researchers in the
past taking into account the social, economic, political and environmental setting of that period
since 1950s. No one of a kind definition emerged in most recent couple of decades in the
historical backdrop of corporate social responsibility that can be utilized for all purposes.
era of social responsibility in fifties, held as an expert researcher of this period has stated a
corporate social responsibility throughout the years for example in seventies, friedman (1970)
community and has defined the corporate social responsibility as it is a responsibility of any
business in terms of using all their resources to gain profit by following the rules to develop a
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Also Hopkins (1998) has develop a new concept of corporate social responsibility on handling
internal and external stakeholders from ethical perspective in nineties, his point of view focusing
on corporate social responsibility activities which must treat the stakeholders of the company
morally or in socially dependable way weather they classified inside or outside the company.
Moreover, Hopkins (2007) also illustrates the concept of corporate social responsibility
activities ought to treat the stakeholders in responsible and ethical manner. The purpose of that
recommendation among social responsibilities is to improve the living standard whereas the
Mohr et al. (2001) has developed two methodologies which can build up the idea of corporate
social responsibility, firstly, the economic vision which relates to maximize profit and improve
shareholders wealth in the first place. Subsequently, following the corporate social
responsibility activities calling is valuable for all stakeholders. Secondly, the socioeconomic
profitability to society and diminished the negative impacts of its actions on society. Abrantes
Ferreira et al. (2010) comes to comparable discoveries showing that the socioeconomic vision
makes the theme of corporate social responsibility more extensive to include advancing social
advantages as a correlated goal for the organizations. This methodology distinguishes that
corporate decisions and their results influence an extensive variety of social specialists, settling
decisions in light of components other than those of economic position (Guler, 2012).
Abrantes Ferreira et al. (2010) have found that corporate social responsibility factors are about
activity which be given from company to society as well as enhancing its present position in
terms of different sorts of activities that assists individuals and environment alongside of
expanding the company profits in the long run. Therefore, the consideration of corporate social
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responsibility activities is a good way to decreases the company expenses in order to improve
their profit.
Taking the awareness of corporate social responsibility as accepted by the different nations,
freeman and Hasnaoui (2010) investigated the meanings of corporate social responsibility as
advanced by governments or associations that are consultants in four nations trying to build up a
common system to characterize corporate social responsibility. The nations picked include
France and England from the European Union and the United States and Canada from North
America (Guler, 2012). The meaning of corporate social responsibility utilized in these nations
may build up normative measures for the act of corporate social responsibility in national and
multinational businesses. The way that the comprehension of corporate social responsibility by
business associations in the UK does not invent from the government order, but it is reliant on
the individual organization, whereas France and use are focusing on governmental departments’
activity.
Regardless of the vast group of literature on corporate social responsibility, there is still no
integrated and exact definition along these lines, corporate social responsibility has a different
meaning for researchers because it is hard to conceptualize. Therefore, some journalists argue
corporate social responsibility. However, all the previous definitions sharing the same idea which
is the company ought to meet social expectations during the preparation of the environmental
Competitiveness:
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Previous studies on corporate social responsibility and competitiveness is uncommon, in spite
of the fact that it has become exponentially in the previous couple of years. Most literatures on
the relationship in the middle of competitiveness and corporate social responsibility have
corporate social responsibility and financial performance different thoughts have suggested other
approaches, for example, producing a competitive advantage for the company by making
variables, for example, reputation, or by following a case study that include corporate social
responsibility gives the positive influence in short term profitability in order to a long term
competitiveness . Therefore, the primary concern is McWilliams and Siegel (2001) stated that
Differentiation:
Corporate social responsibility activities as a different strategy to produce products and services
would create a new demand. businesses who implement differentiation strategy frequently seek
after numerous means of differentiation for instance, ben and jerry's, which distinguishes its
items by making extraordinary flavors, utilizing high quality ingredients, supporting the whole
society, and advancing assorted qualities in the working environment. Corporate social
responsibility may be a noticeable method for accomplishing differentiation in line with it allow
Cost reduction:
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The business case for corporate social responsibility contends that there are truthful purposes
behind a company to put their resources into corporate social responsibility activities. from an
economic point of view, there is hypothetical rationale and some observational confirmation that
taking part in socially responsible activities can diminish costs and risks to the firm in addition to
Corporate social responsibility could likewise build motivation for those representatives who are
employee motivation and retention could bring about expansions in efficiency and cost savings.
The organization may likewise be more attractive to future workforces. On the other hand,
numerous researchers state that corporate social responsibility is helpful to society, as well as to
the organizations themselves, also they stated the a advantages of corporate social responsibility
engagement could arise from different sources including increasing shareholder wealth through
insurance like protection, enhanced risk management, market appeal to customers by planned
methodology, enhanced transparency, and simpler access to financial business sector. All or some
subset of these variables could possibly diminish firm risk of controversial industry firms. God
Frey (2005) claims that ethical capital can provide shareholders with insurance protection related
with intangible assets. Also some kind of corporate social responsibility activities could provide
other advantages like goodwill. According to Waddock and graves (1997) stated that get more
emphasis on social performance will ensure better financial performance in terms of using their
financial resources manpower commitment and other factors effectively. Once stakeholders deal
and understand their social responsible activities, the company more capable to improve their
the monetary benefits includes direct which reflect as a primary value drivers whereas the
indirect classified as a secondary value drives such as firm competitive advantage that leads to
gain governmental support and well reputation, these advantages are essential specially for
Social activities have different sorts of costs classification. . Weber (2008) recommends that the
continuous costs of these activities are separate from the one-time costs, for example one-time
costs like installation costs, one time donation or any comparable investment costs. The
continuous cost such as fees for patents or licenses, material costs or marketing costs. Additional
types of costs of corporate social responsibility activities promoting to a more exposure of press
and nongovernmental organizations (weber, 2008). Yon et al (2006) have mentioned that social
activities could damage the image of the company if the purpose of these activities were for.
Accordingly, such a mistake might affect the company reputation in negative ways which make it
worse than who not engaged with these social activities including more costs wasting. moreover,
Bhattachary et al. (2011) recommended the risk of social activities will harm the company
competiveness, they also propose that a couple of fundamental standards can diminish this risk
by firstly, improving the market motives by supporting a genuine social activities in order to
attempting to fulfill the particular needs of customers. Secondly, attempt to align the company
objectives in order to satisfy stakeholders goals will lead to increase the value of these social
Weber (2008) stated that corporate social responsibility activities cost are difficult to measure
and conventional accounting systems is not capable to recognize these costs if it is related to
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corporate social responsibility or it is not. There is likewise a risk of cost distortion because of
the overhead that distributed taking in to account for instance number of units (Haire, 2005).
It ought to be outlined in a manner that the whole kinds of business responsibilities are
contained. It is proposed here that four types of social responsibilities constitute all out
Economic responsibilities:
Business associations were made as economic objects intended to give merchandise and
administrations to social individuals. The profit thought process was set up as the essential
motivating force for business enterprise. Before it was whatever else, the business association
was the fundamental economic entity in society. All things considered, it’s to deliver products
and services that satisfy customer needs. Eventually the thought of the profit intention got
changed into an idea of maximize profit, and this has been an enduring from that point onward.
All different business responsibility is predicated upon the economic responsibility company
(Carroll 1991).
Legal responsibility:
Society has not just authorized business to work as a profit relation; business is predictable to
follow the laws and regulations asserted by government. As a fractional satisfaction of the social
contract among business and society, firms are relied upon to seek after their economic missions
Ethical responsibility:
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The economic and legal obligations represent ethical standards about reasonableness and justice,
ethical responsibility hold those activities and practices that are predictable or excluded by
societal individuals despite the fact that they are not arranged into law. Ethical responsibility
expresses those guidelines, standards, or desires that reveal a consideration toward what
Philanthropic responsibility:
Philanthropy incorporates those company activities that are in light of society's expectation that
organizations be great corporate subjects. This incorporates effectively related in acts or projects
financial resources, for example, assistance to expressions of the human experience, education,
or community. The deference highlight between philanthropic and ethical responsibilities is that
The common idea behind the firm implementing and invest on corporate social responsibility
activities has discovered from the stakeholder theory domain. This theory recommends that
important for any business to reach the long term successful is depending on fulfilling both
economic purposes such as profit maximization and increase shareholders wealth as well as non-
economic initiatives like adopting corporate social responsibility approach. Early research in the
`purposes .In other words, this hypothesis proposes that organizations are motivated to expand
their targets to contain different objectives in order to maximize profit. Accordingly numerous
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organizations hold into a corporate social responsibility program as an approach to advance
socially liable activities and arrangements, and successfully react to stakeholders demand (Gupta
2011).
Maignan et al. (2005) observe corporate social responsibility 's linking with business marketing,
recommending that when a firm satisfies its corporate social responsibility , that firm extremely
supports company image, accordingly enhancing firm performance. Also Maignan et al. (2005)
contend that corporate social responsibility involvement would develop the stakeholders’
satisfaction within the company identity. Lay et al. (2010) explore the brand performance on
adopting corporate social responsibility activities and linked it with a positive influence in the
industrial brand equity. Moreover, Torres et al. (2012) utilize a board information containing 57
worldwide brands of 10 nations during the period from 2007 to 2012 and found that a positive
different perspectives have presented the best techniques from corporate social responsibility
implementation, Carroll’s (1979) fundamental model represent the vital aspects of corporate
responsiveness and society. Proactivity, accommodation, defense, and reaction are the four
dimensions of corporate social responsibility. These the first responsibility is the economical,
then the legally, ethically and the optional. wood (1991) changed Carroll’s model and stressed
the social responsiveness ought to be taken as environmental, then stakeholder management and
the related issues of management, also illustrated that corporate social responsibility should be
proof showing that organization does not have to work through the integration of corporate
responsibility. Maignan and Ferrell’s (2004) also conducted the view point of Clarkson (1995)
which describes corporate social responsibility activities have to be taken to fit with stakeholder
implementation strategy the organization need to concentrate on what the stakeholders needs and
Additional literature done by McWilliams and Siegel (2001) present a different way to measure
the ideal level of corporate social responsibility which is by cost benefit analysis, this
measurement has developed by social auditing. The measurement is the procedure of observing
and reporting duties in lights of the social impact and ethics conduct. Raghubir et al. (2010)
illustrated the agreed model to help organization incorporate social auditing. This model includes
stakeholders, objectives, assets, returns and the proficiency of cost. This model lead to the
Clarkson’s (1995) have examined corporate social responsibility measured utilizing the kinder,
Ladenburg, domino (kid) information that reflects business thought regarding several stakeholder
issues specifically, the associated five classes of the kid information have been regularly utilized:
(1) employee relations, (2) product quality, (3) community associations, (4) environment issues,
and (5) differing qualities issues. to begin with, the rates the employee relations scores depend on
representatives health and security, the provision of retirement advantages,. Secondly, the
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product quality scores are assessed as far as how an organization is worried with consumer
relations by offering quality and advanced products in addition by guaranteeing the safety on it.
Thirdly, the community relations by insure that the company does some activities such as
supporting the natural level of firm such as clean energy, providing a friendly product and
services and recycling. Finally, company achieves diversity management operations such as
women employment and minority executives, contracting with minority suppliers (Inouye and
lee 2011).
One significant conclusion in past examination is that the level of linkage in the middle of
corporate social responsibility and CFP might vary depending on the measurement of particular
dimensions of CFP (griffin and mason, 1997). For example, griffin and mason (1997) discovered
its impact on market evaluation of an organization future productivity. Hillman and Keim (2001)
noticed that a composite of the five scores talked about above positively affected market
evaluation, however did not have any notable consequences for accounting based financial
related variables such as return on asset. In a review that analyzed a long term corporate social
responsibility and CFP relationship among organizations in the Malaysian market, Saleh,
Zulkifli, and Muhamad (2008) showed that corporate social responsibility did not impact future
return on asset, in contract of it affected the future market evaluation (Isadore Newman, 1998).
A wide range meaning of firm financial performance has also been planned in the literature
(Barney, 2002). Both financial and market definitions have been utilized to think about the
relationship between corporate social obligation and firm performance (orlitzky, Schmidt, and
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Rynes, 2003). However, following most social responsibility researchers look to realize the ways
that socially responsibility corporate actions can improve or diminish shareholder wealth,
Actually, by adopting such a financial definition focusing on firm performance on how socially
characterized as the cost of a company’s equity multiplied by the quantity of its shares
outstanding. in this manner, this question have been asked from different literature, assuming
managers look for increase maximize profit and shareholder wealth with the industry, is it
appropriate to involve corporate social responsibility activities and increases the cost by that
The subject of corporate social responsibility has become expanding consideration as these
decades. The act of corporate social responsibility is still debatable since it obliges firms to start
enhance extra interests in corporate social responsibility. These corporate social responsibility
theories are regularly reviewed through the economic cost benefit systematic lens, and accepted
advantages from corporate social responsibility activities drive corporate social responsibility
judgments. Particular point view stated that corporate social responsibility activities increase
costs without satisfactory advantages, cases of these extra costs such as include creating
charitable donations and creating plans for community development (sun 2012). The most of
corporate social responsibility studies have concentrated on looking at the link in the middle of
corporate social responsibility and financial performance of a firm. The results are to some
degree combined. For instance, Aupperle et al. (1985) use study to evaluate (coo’s) points of
view on corporate social responsibility actions and report a negative relationship between
corporate social responsibility activities and financial performance. Other study adopted by
Frooman (1997) assumed that organizations which perform in light of social irresponsible or
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illegal technique will affect the shareholder wealth negatively. That point shows the importance
Moreover, more (2001) concentrates on eight fundamental organizations in the UK store industry
and finds a negative relationship in the middle of corporate social responsibility and financial
performance. although, those contending for a negative relationship in the middle of social and
financial related performance trust that organizations that perform responsibly lead to unearned
(1970) argues that there are obvious economic benefits to social activities with high level of
costs, which will lead to reduce firms profit in order to share wealth. Therefore, this point of
view illustrated the negativity of corporate social performance and the financial performance.
Nelling and web (2009) found no significant evidence that company’s financial performance is
related to corporate social responsibility activities. On the other hand, numerous corporate
corporate social responsibility and financial performance. Cochran and wood (1984) locate a
positive linking in the middle of corporate social responsibility and financial performance. Also
they bring up that more common measures of corporate social responsibility are expected to
further research around there. McGuire et al. (1988) supported the idea of Cochran and wood in
terms of the positivity of enhancing the corporate social responsibility activities within the firm
performance improvement. Other study adopted by Frooman (1997) assumed that organizations
which perform in light of social irresponsible or illegal technique will affect the shareholder
wealth negatively. That point shows the importance of acting in socially responsible way will
improve shareholders wealth. According to recent studies have been made by Beurden and
Go¨ssling, (2008), they discover that the social activities bring the benefit for wealth
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maximization in order to improve the relationship with stakeholders that conclude additional
returns for companies. Thus, these positive relations with investors, government, employees and
Ingram (1977) introduced a study in view of the financial reports from 1970 to 1976 for 287
firms. He found that the reported data on corporate social responsibility activities had no impact
on firm performance at all. After two decades, McMillan (1996) inspected data disclosed by 12
conclusion he attracted was fundamentally the same to Ingram’s. However, Milne and paten
(2002) have done a questionnaire survey comprising 70 senior accountants in the US and
demonstrated that data about corporate social responsibility has appreciation over the long term
for a capital investment decision. griffin and mason (1997) have finished their statistic of 51
articles between the period from 1972 to 1997 to demonstrate the linking point between
corporate social responsibility and CFP, they found that 33 article including a positive relation
whereas 9 articles shown negative relation, and the remaining article represent that there is no
relation between corporate social responsibility and CFP (Stanwick and Stanwick 2000).
Margolis and Walsh (2001) have reviewed a collection of studies, which used 27 particular
financial firm performance and the other direction is trying to verify if the financial performance
dependent variable. Margolis and Walsh (2001) also stated that these measurements have
considered both accounting and market measures. The results were 53 per cent had confirmed
that corporate social responsibility and CFP have a positive relationship. On the other hand, 68
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per cent of the previous study had confirmed that CFP has an effect on corporate social
responsibility. furthermore, according to (orlitzky et al. (2003) study, the outcomes include
almost the same Margolis and Walsh results and found that 22 per cent illustrated that there is no
relationship between corporate social responsibility and CFP. Aguilera et al. (2007) stated that
the majority of evidences have been collected indicates that the most common results show a
Further question have been asked from plenty of researchers as what is the reason of corporate
social responsibility activities are positively affect the financial performance? orlitzky et al.
(2003) represented the answer that corporate social responsibility action improvements through
company performance is a helpful for companies to satisfy their stakeholder and this is the best
way to increase and improve the firm financial performance. Rettab et al. (2008) also asserted
that the importance of this engagement, companies ought to ultimately interconnect their
Review, 2013).
Different viewpoint of concepts have been made from diversity of scholars’ to demonstrate the
relation between corporate social initiative and firms’ financial performance, these perspectives
categorized as:
Agency perspective:
Freeman (1984) argues that neglected of agency perspective on corporate social responsibility
from shareholders, managers might exploit organization resources to seek after which is in relate
to their benefit in terms of increase shareholders cost. thus, social performance comes to
detriment of financial performance since the important resources are abused in light of managers
utilities as opposed to being spent on activities might be helpful for shareholders wealth.
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Stakeholder perspective:
Moskowitz (1972) emphasize the stakeholders’ perspective that organizations have associations
with numerous essential groups such as customers, employees and social which they affect
management positively in line of the ability to accomplish competitive advantage and long term
stability for instance, a good employer socially may get ethically improvement, efficiency and
satisfaction. However, Jensen (2002) argues that there is no relation between satisfying firm
stakeholders and maximizing shareholders value, Jensen uses an excessive part of the structure
of stakeholder theory but highlighted the importance of long term value maximization within the
The Rb influence the company performance well and indicates that firms are more capable to
perform better in line with the competitors in order to produce addition shareholder value
stated that the previous resources have to be valuable, rare and non-substitutable to establish
sustain competitive advantage. Waddock and graves (1997) stated that in an occasion of surplus
resources will lead to better firm performance and also provides more social activities. In other
performance. Further, as a company had a good financial performance, it has more ability to
spend on social issues. Therefore, resource based view support that corporate social
responsibility actions are helpful for managers in terms of developing intangible assets such as
brand name which without a doubt will improve the firm financial performance.
Vermeulen and Barkema (2002) also demonstrated that the way in which a firm involves part in
new activities can overall influence the amount of information can be achieved and retained from
31
these activities, at the same time influence the benefit produced from the engagement. They
found that the speed, regularity, and scope in the items and areas of the organizations global
development could fundamentally change the financial advantages of such development. This
viewpoint therefore gives us how a firm can deliberately take part in corporate social
responsibility related to the activities that managers have chosen. On other words, these
corporate social responsibility activities might be useful for such type of companies and might be
3.1 The theoretical approaches of corporate social responsibility and corporate financial
Using of various theoretical methods clarify the results of the organizations between corporate
social responsibility and CFP, as numerous researches indicated worldwide. Remarkably, there
are four assumptions of the theoretical relationships between corporate social responsibility and
CFP, namely, the trade-off hypothesis; the supply and demand theory of the company; the social
impact of hypothesis; and the theory of modern corporate stakeholder (Saleh et al. 2011). The
four theories broadly examine the influence of corporate social responsibility on financial
performance.
The trade-off hypothesis which presented by Friedman (1970) claims that the only responsibility
of a company is to maximize their profits. Moreover, when businesses engage in social and
environmental actions, it suffers additional expenses as well as decreases the incomes of the
businesses. Hence, according to this theory, the higher a corporation’s corporate social
responsibility level, the lower the CFP (Salzmann et al., 2005). Accordingly, increasing the
involvement of corporations in social actions could growth the aggregate resources consumed by
32
the business, and, as a result, decreases the earnings of the business. Thus, this positions the
social responsibility activities. Thus, corporate social responsibility has an undesirable effect on
The supply and demand theory of the business was presented by McWilliams and Siegel (2001).
responsibility activities makes the most of a business’s profits. Steger et al. (2007) argues that in
however, profit could be maximized or static. Hence, there is no connection between corporate
social responsibility and CFP. This theory is reinforced by empirical findings of preceding
studies that states there is no association between corporate social responsibility and CFP.
The social impact hypothesis created by Cornell and Shapiro (1987) indicates that the
development of a business’s corporate social responsibility activities will improve CFP. Hence,
the anticipated paybacks of executing corporate social responsibility activities will surpass the
expenses of the activities (Steger et al., 2007). This theory highlights that the relationship
between corporate social responsibility and CFP is positive. There are numerous motives to
improve the level of corporate social responsibility activities, such as, improve the brand image
of the corporation, progress synergies with financial institutions, and minimize the risks of the
business. The empirical study tells that corporate social responsibility has an encouraging
influence on CFP (Simpson and Kohers, 2002; Waddock and graves, 1997)
The theory of stakeholder can illustrate the association between corporate social responsibility
and CFP (Cornell and Shapiro, 1987; freeman, 1984). Representation to the stakeholder theory,
the worth of a business is connected to the cost of “explicit claims” and “implicit claims” on a
33
business’s resources. Stakeholders have a clear entitlement on a business including owner-
lenders, human capital, and the government. There are many claims on managing a business
through external stakeholders, which are also known as implicit claims. Cornell and Shapiro
(1987) state that some implicit claims involve the stability of resources, on-time delivery, quality
assurance, safe work environment, as well as participation in social and environmental activities.
The charge that has be rewarded by stakeholders for this claim rest on the business’s condition as
well as the financial strategy suitable for the business (Heldman, 2011).
Griffin and mason (1997) have looked into 51 literatures on corporate social responsibility firm
implementation and found that different methods have been used to measures firm performance
for instance firm size, return on assets (return on asset), return on equity (roe). The most
repeatedly method used to measure firm financial performance is (return on asset). Mainly,
contrast of other accounting measures like return on equity or return on sales. Return on asset is
not affected by the differential level of leverage within the firm. Since return on asset is
absolutely connected with the stock price, a higher rate of shareholder wealth indicates to a
higher return on asset. In considering firm assets for example the manufacturing process, return
on asset is the best sign of firm performance (Mishra and Suar 2010).
Financial performance measures are lag indications and catch recorded accomplishment
emerging from generally tangible assets (Mishra and Suar 2010). Old literature often did not
accomplish to correctly record performance from intangible assets, for example, customer
relations, employee satisfaction, and invention and develop an investment research work, which
are important sources to get competitive advantage. On the other hand, non-financial measures
34
concentrate on a company’s long run profitability components for example; develop a research,
customer satisfaction, efficient procedure, employee satisfaction and other intangible assets
improvement (Kaplan and Norton, 2001). These previous factors have discount cost rather than
getting capitalized, also these actions of intangible assets reduce the current profit on the same
time it generate profit for firm long-term profitability. Non-financial performance measures give
performance in the first place. Financial performance measures are the firm objectives in while
non-financial performance measures are subjective environment. However, both financial and
non-financial measures are utilized for assess firm performance comprehensively (Ittner and
Larcker, 1998).
One basic reason behind the instability about the relationship in the middle of corporate social
responsibility and financial performance is that a difficult issue has bother specialists until this
moment is the issue of measuring CSR. CSR is a multidimensional concept, with activities going
over a wide range of inputs and outputs. These activities similarly occur in different located
industries, different landscapes, and changing historical corporate social responsibility domains.
Further, several problems managerial judgments and organizations behaviors are involved
within corporate social responsibility implementation. Subsequently, little clearness has been
touched related to corporate social responsibility measures, these measures utilized in empirical
work using one dimensional in order to be applied in unqualified samples of organizations. There
A reason which makes corporate social responsibility engagements a massive topic inside of a
scholastic context and a pressing item on the corporate plan is the way that worldwide
35
organizations put millions in managing corporate social responsibility projects to meet
corporate social performance (marina et al., 2008). At the point when looking for the meaning of
corporate social responsibility activities it turns out to be clear that it guarantees that
organizations are working in an ethical way. consequently, social, economic and environmental
responsibility definition and social types which affect the firm performance, in addition to the
techniques of corporate social responsibility measurement that have been used form previous
studies, the pressure on businesses to engage in corporate social responsibility has increased.
Many leaders have responded to these pressures, but some have resisted (Sharma, 2013).
Those who resist typically appeal the tradeoff between corporate social responsibility behavior
and profitability. Additional, when social initiatives are not associated with business objectives,
corporate social responsibility could become an obligation and diminish previously held beliefs
among customers about companies. Scholars have responded by trying to determine the effect of
corporate social responsibility on profitability. However, the results of several empirical studies
of the relationship between corporate social responsibility and profitability have been
inconclusive, reporting positive, negative, and neutral results. Probable descriptions for these
diverse outcomes include changes in operationalizing the variables across studies and an
36
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 INTRODUCTION
Research methodology is important in gathering information needed for the study. This chapter
therefore entails research design, population as well as sampling size, research mechanism,
rationality and dependability of the data, appraisal of variables, data assessment approach and
limitation of the research methodology. The theory of any research is depending on the
researchers’ principles and assumptions of the way he see it. The majority of scholars have
classified the research philosophy to two categories, positivist philosophy and interpretive
Generally, research approach is developed according to the phenomenon that the researcher
wants to test. Therefore, selecting the suitable methodology for any research is necessary by
Saunders et al., (2007) illustrated the deductive process when the researcher moves forward from
the whole idea of the research to end with specification on it. This is the same meaning of
depending on such a theory to conclude hypotheses, as a result, follow a strategy to test these
hypotheses. The other way is inductive process which begins with observation, after that the
research begins creating a theories taking into account the generated observational results.
Although in this method of research it is capable to adopt headings even after the start point of
the research. Since this research aims to find the impact of corporate social responsibility on firm
37
financial performance, the hypotheses have been developed to test this impact by using the
deductive approach which is the most appropriate methods to earn accuracy outcomes (Saunders
et al., 2007).
Researchers ought to consider the appropriate kind of methodology while doing their research.
The common two types of collecting data are by quantitative or qualitative or in some case using
both at the same time. The qualitative methodology is connected with interpretive model that
related with the activities and opinion of humans which usually are complex and illogical
the other hand, the quantitative method is connected with positivism model and has been
classified as an objective or phenomena related to research subject, also it reflect the deductive
logic and it emphasizes that meaningful research can consider the real observation of
phenomena. Secondary data is depending on measuring pervious basis collected from prior
There are particular advantages of quantitative method. Firstly, it takes into consideration a more
extensive study which thus, improves the accuracy and objectivity of the outcomes for the
research. Secondly, the results will independent in order to needs less time to proceed. Thirdly, it
is much helpful for analyzing a countless number of statistics. Fourthly, secondary data is a
dependable for social information and lesson subjectivity (Collis, J. and Hussey, R
control the environment as long as the respondents answer the question. Secondly, the answers
are incomplete in some cases since it does not reflect individuals’ opinion about the main subject
arithmetical, statistical or numerical data approach. The objective of this approach is to create as
The sequence of appraising the core to quantitative research is important due to the fact that it
provides the main link relating to real observation and numerical expression of quantitative link.
The data that is numerical such as the statistic as would mean that the quantitative research seek
to provide solution to unique question and also collect a sample of arithmetical data observable
The researcher scrutinizes the data gathered with the help of statistical too with the aim of
creating non-discriminatory outcome .the use of quantitative approach depict same sample size
unlike quantitative research,that would lead to dissimilar approach when it comes to using the
data gathered. The main part of the qualitative analysis is the interpretation of the data collected;
the larger sampling present for the research to quantitative research approach enables outcomes
to be detailed from the research model. In qualitative research, such generalizing capacity is not
appropriate approach. Qualitative research seeks to deal with human understanding as well as
more linked with transferability when the findings fit into the situation outside the research
situation that are determined by the resolute by the similarity of fit entailing the two
situations(Marcm 2014).
Research designs are the structure of the study focused at ascertaining variables as well as their
association to each other. This is important for the study in obtaining data to permit hypothesis
testing or provide solution to the research question. It is a plan that acts as guide to the examiner
in an effort of creating data for the research. In this study, the research design employed is the
39
survey design. This is a design in which sample subject and variables that are currently under
research are just being observed since they are devoid of any effort to manage to influence them.
The aim of the survey design is focused on identifying the inter-link between variables. the
as well as going beyond the observation of the correlation between independent as well as
The idea that the fact of the matter is absolutely autonomous from us is belong to realism
philosophy which generates the positivism bias, which also connected with the researcher
thoughts as a result of social since illustrated. Researchers depend on the positivism theory to
deliver more reliable and sensible results. Also could be known as the information that arises by
relying on this theory is viewed as more reliable in terms of the researchers is following
independent approach. This theory accept that social phenomena could be measured by
example, numerical information which accumulated by utilizing techniques as surveys and cross
There is another contention that expresses the interpretive theory, which is basically taking into
account the thought that the fact of the matter is not objective but exceptionally subjective. This
is on the grounds that it is unable to separate the theory from the researchers. This theory highly
recommend to examining and depicting data that are gathered by an interpretive way. Dissimilar
to the positivism technique this theory creates data from qualitative strategies, for example,
interviews, focus groups and the data that has been gained from qualitative
40
The research design employed in the study therefore entails the use of descriptive design which
leads to the discovery of link between the diverse variables. A descriptive case study was
deeming important to discover causation to identify fundamental principles. The research design
was significant in undertaking a detailed research in which focus was placed on the assumed of
The research population is very large, so 100 respondents were chosen from the top level
administration, middle level and the supervisory level which must be an ideal representation of
the population on the basis of stratified sampling. this cut across any divisions in the nestle such
as the corporate affairs divisions, customer’s services division, retails division, marketing
division as well as other division with the company. 145 clients were chosen from clients through
random sampling. Five business associates of nestle provide with questionnaires to implore their
perception on the subject matter of the research. The basis of selecting the sample size and the
samples themselves was based on the significance of information needed from the respondent.
For instance, this research intend to get some few questions from the stakeholders and thus
intend to have a small sample size form the stakeholders while, much information will be
gathered from the external stakeholder more specifically from the society and staff of the nestle
UK, this two sample will command more sample size and thus more information will be realized
from the staff of the nestle and the external stakeholders. This is the basis that forms the sample
size amongst the three key respondents. The sample was categorized based on the size of the
sample and the size of the questionnaire forms that will be supplied to respondents.
The questionnaires were distributed differently since, the population and sample for staff, the
workers and the stakeholder where different and thus, i distributed the questionnaire forms on the
41
basis of highest size of respondent who were provided with the questionnaire forms first who
basically were the community living within the nestle UK (Halifax) followed by the less sample
size which is anticipated to be from the customers of the nestle UK and then the least sampler
size which is anticipated to be from the stakeholders of Nestle UK (Halifax) The different time
of questionnaire forms distribution eventually help in saving on time, cost and money since, the
received feedback simultaneously which enable to organize the work correctly in order to avoid
The instrument employed in collecting the data for the research purposes was the questionnaires.
The questionnaires entail the appropriate questions specific to the research study. The data
collected from competed questionnaires were examined and used for research. The choice of
numerous research approaches for collecting data depends on the variables to be ascertained, the
source as well as the resources existing at present. Data collection should conduct at interval
adequately recurrent for management reason; frequently collected data will possibly have to
place reliance on personnel providing data. As discussed above, the study aims to collect data in
some ways; primary and secondary data, survey and questionnaires. This data is analysis tool are
identified and ascertained based on its relevance in using the method in collecting data and
analysis and conclusion made on the best data collection tool to be employed in the research.
The questionnaire was intended to identify the current corporate social responsibility as well as
to aid in creating potential framework for CSR. The questions created in compliance with the
expert field of concern, Furthermore, some questions were not related to corporate social
responsibility for instance, “what do you presume about CSR” and why do the company
implement CSR. After successful filling of the questionnaire by the respondent, all feedback
42
provided were matched with the second round questionnaire as well as examined with the use of
statistical tool.
To be certain of the research instrument to be usable and dependable, as the standards of the
research mainly place reliance on standards of the instruments employed and technique
employed in gathering the data because the two importance of quality research are the validity
and reliability, the examiner guarantees that the question interdependent on the basis of the
following standards;
The questions were created in a manner that it is simple for the respondent to
comprehend them.
The questions enquired were less and appropriate to create the needed
information.
The question needed answer that was direct and correct intended question are
Because rationality is the extent to which the instrument employed appraised the envisioned
measures, the correctness of the study instrument being dependable if the data gathering
The data analysis was designed to address the research question of the research. The main aim of
creating CSR index is to appraise the data with the use of quantitative tool in order to permit
43
more evaluation such as understanding the connection between the CSR and company financial
performance. The statistical tool used in examining the data collected in the research is:
Tables
Tables are efficient and also give a summary of the quantitative data. They are employed to
organize facts as we’ll as figures in column and rows.These facts and figures might be
methodically investigated. In this regards, tables are good for pour research purposes.
Percentages
important in showing the respondent’s distribution as per their response. The benefit of
percentage for our research is that, it will give an overview of the population and simple that is
simple to interpret which makes percentage method good for our research.
Sampling Design
According to Cooper and Schindler (2004), a sample is a subset of population elements whilst
sampling is related with the collection of individual observations aimed at yielding some
understanding concerning the population of concern for statistical references. The intent of
sampling design is important when it is impossible to research the whole population data. For our
study, the researcher was not in a position to research the entire population because of volume of
limits that entailed time, cost and size of the populations. The examiner developed a small group
of 250 respondents from the population that is representative of the whole population for
research.
44
3.4.1 Sampling Technique
The research was a survey where 250 respondents within UK Halifax factories were sampled. I
used systematic sampling in order to select respondent because the target population is deem
consistent , the first 10 responded were provided questionnaires to fill them and return, then
another first 10 at subsequent time and the procedure went up to sampling of 250 respondents.
The research employs two key data collection method; the primary data which entails the
collection of first hand information which will be the use of questionnaire for our case study and
secondly, the secondary data will entail he use of annual report in order to collect the second
hand information for analysis. The two data collection methods are explained in detailed below:
Primary data was on the basis of questionnaires in which collected data from the company staffs,
the stakeholders and the customers in understanding the impact of CSR on firm financial
performance. The primary data used was collected from questionnaires form the respondent at
nestle UK (Halifax), the consumers, nestles business partners (external stakeholders) and the
consumers of the Nestle UK (Halifax) products. The research population is very large and thus
100 respondent’s form the top level, middle and lower level management were considered
appropriate for the study on the basis of stratified sampling made. this cuts across many division
in the company such as customers survives department, corporate affairs, retails division
market , finance division and other areas that was considered appropriate for the study. 145
customers were chosen by way of random sample. Lastly, five business associates of nestle UK
(Halifax) were interviewed by overseeing sample structured questionnaires for their response in
45
3.5.1.1Questionnaire
The research employs this approach majorly in collecting data for decision making.
Questionnaires entail filling of the form by the respondent individually. Questionnaire may be
handed out and collected at a later date. This approach may be adopted for the whole population
which may be used to gather data frequently for specialized study, a questionnaires requires the
respondent to fill in the questionnaire personally as well as o requires a superior level of literacy
in which there is numerous languages, a questionnaire must be prepared to take care of numerous
languages of the target group in the research. In order to collect a wide sort of data from the
respondent, questionnaires must be simple and exact with the target questions. Questionnaires
should be brief as well as where the questioners is being provided to a sample population then it
might be prepared to many smaller targeted questions (Sarantakos, 2005; (Ghauri and Grønhaug,
2005).
The secondary was collected from the annual report of nestle UK (Halifax). Secondary data was
performed in order to get send hand information such as the use of annual report to understand
the extent to which the company invested in CSR and its impact on the company financial net
profit realized each financial period for the last four financial periods. The result provided will be
sufficient in providing an information in order to appraise the correlation between the amount
invested in CSR activities and the reported net profit each financial period to undertake the
impact of CSR investment on firm financial performance. The significance of the secondary data
is to find the out gaps in past studies concerning impact of CSR on firm financial performance.
Keeping in mind the purpose to accomplish the ideas of this research, positivism methodology
was considered for some reasons according to Ryan et al. (2002). Firstly, positivism
46
methodology is more appropriate to be utilized as a part of financial needs. Secondly, this
research begins with hypotheses to find the relation between variables to reach to the outcomes
from the gathered data, so the method of this study of work is in accordance with the positivism
landscape. Finally, utilizing positivism approach permits researchers to comprehend the event
causes and effect (Cohen et al., 2000). This study plans to find the effect of corporate social
In this regards, annual report will be important for this research since, they were the main
frequent medium for CSR disclosure as well as getting information on accompany. It is intricate
to identify every source provided by the company that entails the CSR information. Where the
research seems to deem CSR as every document and some are missed a firm’s score will not be
precise. Annual reports are the very accessible medium since, they are accessible on many
databases and thus each registered firms generates their annual report that is very dependable.
This theory highly recommend to examining and depicting data that are gathered by an
interpretive way. Dissimilar to the positivism technique this theory creates data from qualitative
strategies, for example, interviews, focus groups and the data that has been gained from
47
CHAPTER FOUR
4.1 INTRODUCTION
In this chapter, the outcome of the data analysis was presented. The data were gathered and
processed in response to the problem identified in chapter one of the dissertation. Three
fundamental objectives led to collecti0n of data and afterwards the data analysis. The objectives
were to consider how the company embarks on corporate social responsibility as well as what
their encounters of whether the corporate social responsibility inflict on company and lastly, if
the company corporate social responsibility provides assurance on the customers’ confidence
level. This chapter entails the presentation, evaluation and interpretation of the data collected
from the field in using the primary source (questionnaires) and the secondary source (annual
report). The interpretation of the data collected will depict the effect of corporate social
Response Rate
Two hundred fifty questionnaires were distributed tom the respondents, one fourth five were sent
to customers and five were sent to stakeholders while hundred fifty were sent to supplier of
nestle UK (Halifax). However, 99% of the questionnaire were good and used for the research
since, it was returned by the respondent fully filed and correctly. Six more questionnaires were
returned by the suppliers which were deem not usable. The unused questionnaire forms depict a
note on the reasons why the respondent did not finish the survey, or just partially finished with
main part of the survey being blank or one respondent created and revised sections in such away
48
that might not be hard to be entered in the questionnaire forms devoid of the stern interpretation
and modifications.
Out of the 244 retuned questionnaires, respondent rated 86%. From the analysis of the collected,
the response rate depicts more than 90% of the respondent interviewed were of the opinion that
the investment in CSR have an impact on financial performance of the company. 10% of the
response rates were either selected due to errors in filling the questionnaires or the questionnaires
were not filled correctly. Not every male and female respondent provided the same feedback.
Out of the 250 survey undertaken, 5 five were distributed to the stakeholder by contracting them
through emails and 150 questionnaire were distributed to customers who were randomly chosen.
149 questionnaires were retuned back from the customer leading to 99% response rate. The
response from the five stakeholders created 100% response since, five out of five response rate
was received from the respondents. The questionnaire distributed to suppliers had a 94%
response rate since, 136 of 145 questionnaires were retuned fully completed, and nine
questionnaires were disregarded since they had errors and were incorrectly filed. (Note; through
the Email, a arbitrarily chosen respondent pointed out reluctance to fill out the questionnaires
before being emailed, as much as the questionnaire was mailed it was counted as non-response)
Cross tabulation of the difference response rate between male and female responded (The
customers)
49
Graphical presentation of the difference response rates between male and females
From the above table and graphical presentation, it is apparent that many of the females
respondent had their question filed with positive criticism. It implies therefore that,
female’s response is concern with the impact of CSR in the community. Furthermore, the
respondent from customers of nestle depicts that many positive response came from
females. This might be due to the fact that many of respondent are females and thus we
will be expecting high volume of response from females. The general tendency of the
response rate depicts that there were different opinion between males and females of
different diversity concerning the impact of CSR on firm financial performance. Our data
analysis depicts that moment are more concern about the effect of CSR unlike the male
counterpart. This forms the basis why much of our respondent were females since, in order
together an in-depth information, we centered on are that we can get mire sufficient
information hence, our data comprised of 70% women and 30% males.
Cross tabulation of the difference response rate between male and female responded (The Staff)
50
Female
Male s Total
. Is there any impact of Nestle UK investment ion CSR on the
community 16 35 51
Do Nestle UK take advantage CSR investment other than profit
creations? 12 25 37
What do you think about Nestlé embarking on CSR? 2 10 12
Total 30 70 100
Graphical presentation of the difference response rates between male and females
Many response from nestle staff were females and they gave different opinion on CSR and firm
financial performance as compared to males. This depict that even females nestles are more
concern about the extent of company involving in CSR activities. Both the women working with
the nestle and the women who are the customers of the nestle depict close similarities concerning
the impact of CSR and this concludes the fact, in general, women are more concern about the
Descriptive statistics:
Section a
52
The table 4.1.1.1 depicts that 30% of the respondent are male whilst 70% are females. The
implication is that nestle UK (Halifax) has a fair and satisfactory policy on job opportunities for
women. In this regards, the feedback provided by nestle will be inclusive since, result will not be
biased and inclined to one sex. Therefore, the feedback provide from the staff will be relied upon
in concluding on the impact of the company investment in corporate social responsibility on net
age frequency %
16-24 22 22%
25-34 46 46%
35-44 24 24%
45 and above 8 8%
total 100 100%
Source; survey 2016
53
Fig: 4.5 age distribution of nestle staff
The table 4.1.1.2 above, it can be observed that the 22% of the respondents range between the
age of 14 and 24 while 46% are within the age bracket of 25 to 34, 24% being with the age
bracket of 25 to 44 and 8% are in the age bracket of 44 and above (Isadore Newman, 1998). This
implies that many our respondent are mature and thus, they will understand the aim of the
respondent, the question needed and the answers expected from them as far as CSR and firm
54
financial performance is concern, this will ensure that information gathered is not misleading and
be relied upon in making a final decision on CSR and firm financial performance.
status/position %
Frequency
low level manager 12 12%
middle level
73 73%
manager
top level
15 15%
management
Total 100 100%
Source; survey 2016
From the table 4.1.1.4 above, it can be observed that 12% of the respondents are the low level
managers, 73% being the middle level and 15% being the top level management. Many of our
information will be collected from the middle level mangers since, we believe that managers at
times will not be open about the extent of investment in CSR and consequently, we deem that
55
middle level management is the focal point for our information gathering since; this is the best
The table 4.1.1.5 above depicts 68% of respondent being less than a 7 years working experience
while 32% depict more than a 7 years working with nestle UK (Halifax). The implication is that
information obtained from the questionnaire was from staff with sufficient working experience
from nestle UK (Halifax), making the information dependable for analysis (Pam Denicolo,
2012). Our question is structured in such as a way that the information that is strategic is
collected from the responded with more than 7 years experience whilst information that is
general such as the weather investment in CSR would lead to growth in profit will be centered on
respondent with less than 7 years experience, in this regards, categorization of respondent in
terms of years of experience and nature of question asked based on their level of experience
would provide a precise information that is wide and inclusive which will aid the researcher in
understand the extent of CSR engagement by Nestle UK and its impact on net profit of the
qualification frequency %
Ssce 14 10%
Hand 21 23%
b.sc 24 27%
Ba 13 14%
mba/m.sc 14 16%
others 14 10%
56
total 100 100%
Source: field survey 2016
This table 4.1.1.5 above reveals that 10% of the respondent has the Ssce, 23% of the respondent
has Hand, 27% of the respondent have B.Sc., 14% have Ba, 16% of respondent have Mba/M.Sc.
and 8% have other qualifications. It is apparent from the above response that, many of the staff at
Nestle UK learned with Many having experience in B.sc (Bachelor of Science). The level of
experience depicted above is an indication that many of the staff at Nestle UK are knowledgeable
and thus the question asked in the questionnaire is comprehensible and will be answered precise
by the responded, the reason of understanding the level of education for the staff at Nestle Up is
that, it will ensure that the data collected can be sufficiently relied upon in making a financial
decision concerning Nestle UK involvement in CSR and its impact on the company’s net profits
(Sabri, 2014).
57
Table 4.1.1.6: professional qualification distribution of respondents
qualification 19 %
Ace 23 23%
CIM 28 28%
ACCA 19 19%
CIBN 16 16%
others 14 14%
total 100 100%
Source; survey 2016
The table 4.1.1.6 above depicts that 23% of respondents have ACA qualification, 28% having
CIM qualification, 21% having ACCA qualification, 19% of respondent having CIBN
6. What do you think about nestle UK (Halifax) embarking on corporate social responsibility?
responsibility
responses frequency %
necessary 36 40%
compulsory 27 24%
voluntary 14 10%
beneficial 23 26%
total 100 100%
Source; survey 2016
from the table 4.1.2.1 above, it can be depicted that 40% of the respondent are of the opinion that
the opinion that it is mandatory ,10% consider that it is charitable and 26% feels that it is
advantageous.
58
Table 4.2.1.2: respondent replies to impact of the corporate social responsibility projects/programme
on the society
responses frequency %
positive 80 80%
negative 0 0%
neutral 20 20%
total 100 100%
From the table 4.1.2.2 above, it can be observed that 80% of the respondents believe that the
impact of corporate social responsibility is positive while 20% are neutral. No respondent
commented any negative about the impact of corporate social responsibility on society
(Boubaker, 2014).
8. Are there other advantage that nestle UK (Halifax) realizes other than profitability from
Table 4.2.1.3: respondent responds to other advantage that nestle UK (Halifax) realize
other than profitability from the implementation of corporate social responsibility projects
responses frequency %
large customer base 42 49%
customer confidence 21 24%
good corporate image 16 19%
other advantages 7 8%
total 86 100%
From the table 4.1.2.3 above, it can be observed that 49% of the respondents think that nestle UK
(Halifax) benefits the large customer, 24% are of the opinion the company will have customer
confidence, 19% assume good corporate image and only 8% assume other advantages realized
59
from execution of corporate social responsibility program of social responsibilities other than
Table 4.2.1.4: response from respondent on view of growth in profit due to corporate social
responsibility
respondent frequency %
strongly agree 24 27%
agree 38 42%
unsure 16 18%
differ 12 13%
strongly differ 0 0%
total 100 100%
Figure 4.2.1.1 response from respondent on view of growth in profit due to corporate
social responsibility
the table 4.1.2.4 above it can be depicted that 27% of the respondent concur strongly, while 42%
concur, 18% unsure with 0% strongly differing that profit grew due to nestle activities of
60
corporate social responsibilities. Even though I could not have right of access to the records of
nestle UK (Halifax), the outcome from the respondents depict a growth in profitability.
10. Profit declined due to involvement in corporate social responsibility of the company?
respondent frequency %
strongly approve 0 0%
approve 10 11%
unsure 19 21%
Differ 47 52%
strongly differ 13 15%
Total 89 100%
61
it can be observed from the table 4.1.2.5 above that, 0% of the respondent strongly approves,
11% approve, 21% are unsure while 15% strongly differ that declining in profits is due to
11. corporate social responsibility depicts substantial on the profitability of nestle UK (Halifax)?
respondent frequency %
strongly approve 0 0%
approve 12 13%
unsure 17 18%
differ 46 49%
strongly differ 19 20%
Total 94 100%
The table 4.1.2.6 above depict that 0% of the respondent strongly approve, 13% approve, 18%
are unsure, 49% differ and 20% strongly differ that accountability of corporate social
responsibility depict substantial impact on profitability for nestle UK (Halifax). The implication
is that many of the respondents are of the opinion that corporate social responsibility depicts
12. Does corporate social responsibility depict impact on the profitability of nestle UK (Halifax)?
respondent frequency %
strongly approve 17 20%
approve 22 26%
unsure 3 4%
Differ 0 0%
strongly differ 0 0%
Total 42 49%
62
From table 4.1.2.7 above, it can be depicted that 20% of the respondent strongly approve, 26%
approves, 4% are unsure the rest depict 0% of response that the corporate social responsibilities
depict impact on the profitability of nestle UK (Halifax). This approves question13 that many of
the staff believes that corporate social responsibility impact on the profitability of nestle UK
(Halifax).
13. Does corporate social responsibility provide assurance on customer contentment and
corporate loyalty?
respondent frequency %
strongly differ 0 0%
Total 100 100%
the table 4.1.2.8 above show that 40% of the respondent strongly approves , 24% approves, 15%
were unsure while 21% differ, 0% strongly differ that corporate social responsibility provide
assurance on customer contentment and corporate loyalty as well as security depositors funds.
Section B.
The table below depicts the recommended solution and number of respondents with the
Descriptive statistics:
63
Table 4.3.1.1 sex distribution of respondents
From the table above, it can be observed that 40% of the respondent is male and 60% are
females. This would mean that our results from the respondent will be dependable since, the
result will be wide and inclusive in terms of gender based hence, the result provided by the
respondent will not biased and misleading in concluding ion the impact of CSR on financial
the table 4.3.1.2 depict that 40% of the responded have less than 7 years association with nestle
UK (Halifax) while 60% have more than 7 years association with nestle UK. Many of the
respondents are having a long term being with the company since, provision of good products
and services that consider the need for good governance is what drives people to buy Nestle
products as well as associate with the company. The impact is that, Nestle UK will realize
improved profits each financial period as depicted by the growth net profits in the annual profit
64
medium 2 40%
low 0 0%
total 5 100%
From the table 4.3.1.5 above, it can be observed that 60% of the respondent has the high level of
transaction with nestle UK (Halifax). The implication is that many business partners have
confidence in nestle UK (Halifax) in comparison with 40% and 0% for medium and low
transaction correspondingly. The higher the level of transaction, the better for nestle UK
4. Which of these other Multinational corporations do you partner with? Unilever ( ) Cadbury
responses frequency %
Cadbury UK 5 46%
Guinness UK 1 10%
Uniliver UK 4 37%
other multinational
1 10%
corporations
total 11 100%
From the table 4.2.1.1 above, it can be observed that 46% of the respondent does business with
Cadbury UK, 10% do business with Guinness UK, 37% with Uniliver UK and 10% do business
with other multinational corporations (MNC). It means therefore that, many of the supplies do
business with Nestle UK. This might be attributed by the good governance compliance by Nestle
UK and also demanding the same governance compliance within the supply chain management
of Nestle UK and its stakeholder. This nature of supply chain management that observe
environment leads to growth in sex of partners who do business with nestle since, a sustainable
65
environment attract more customers and reduce less legal implication for the company and the
suppliers(Siegel, 2001).
Many suppliers are always associated the good supply chain management practices that embrace
good governance in terms of environmental safeguards. This is an indication that, to make more
profits company need not only invest in community projects as a way of CSR engagement as
well as consider the sustainability standards with their supply chain in order to encourage large
customer base and supplier good association. This will ensure that the production capacity for
Nestle UK will be steady hence making the company experience gain in net profit since, a steady
supply of input will meet the steady demand of Nestle Up product. Steady supply of input is
always associated with engagement with suppliers that embrace good governance in terms of
5. Are you aware that nestle UK (Halifax) embarks on any programme that is valuable to the
responses frequency %
yes 5 100
no 0 0
undecided 0 0
total 5 100
From table 4.3.17 above, it can be observed that 100% of the respondent confirm that nestle UK
(Halifax) embarks on program that is valuable to the society and 0% did not degreed. This is
good indication of the good corporate governance assumed by Nestle UK in ensuring that the
66
company will have good corporate image in the society and the public due to active engagement
in corporate social responsibility, which in turn leads to growth in net profit for the company.
responses frequency %
positive 5 100
negative 0 0
neutral 0 0
total 5 100
From the table 4.2.1.3 above, it can be observed that 100% of the respondent is of the opinion
that the impact of corporate social responsibility is positive while no respondent had negative or
neutral responded as observedReveals that all (100%) of the respondents felt the impact of
7. Are there any other advantages that nestle UK (Halifax) benefits other than profitability from the
responses frequency %
large customer base 5 100
customer confidence 5 100
good corporate image 5 100
the table 4.2.1.4 above depicts that 100% of the respondent are of the opinion that nestle UK
(Halifax) will advantage from large customer base, 100% believing that the company will have
confidence on customers, 100% are of them opinion that nestle is having a good corporate image
with the community and 100% of the respondent consider that nestle UK (Halifax) will
advantage from other benefits that might be realized from involvement of corporate social
responsibility other than profits(Longest, 2014). It analysis of the above responded is that, large
shall be a growth in company image since, customers are always associated with those
companies that actively engage in CSR activities (Vidaver, 2008). The impact of this engagement
is that, there shall be increase in revenue and the net profits subsequently.
Section c:
respondent frequency %
strongly approve 3 60%
approve 2 40%
unsure 0 0%
Differ 0 0%
strongly differ 0 0%
total 5 100%
from the table 4.2.1.5 above it is apparent that 60% of the respondent strongly approve that profit
increase due to company involvement in corporate social responsibility , 40% approves whiles
pother are 0% implying that they are unsure, differ and strongly differ respectively. The
implication is that many of the respondents consider that profit of nestle UK (Halifax) is growing
UK (Halifax)?
respondent frequency %
strongly approve 5 100%
approve 0 0%
unsure 0 0%
Differ 0 0%
68
strongly differ 0 0%
total 5 100%
The table above depicts that 100% of the respondent strongly agree that corporate social
the respondent, agree, unsure, differ not strongly differ .The implication is that, there is a strong
correlation between the company involvement in corporate social responsibility and the growth
in net profit. The respondent are the main beneficiaries of the CSR project and their opinion
concerning company involving in CSR activities would depict a true situation of the company
engaging in corporate social responsibility. In this regards, the response above is a true depiction
of the advantage of engaging in corporate social responsibility with regards to growth in the
responses frequency %
other benefits 8 6%
total 145 100%
69
4.4 test of hypotheses
h0: corporate social responsibility depict no an impact one profitability of nestle UK (Halifax)
ltd.
h1: corporate social responsibility depicts an impact on the profitability of nestle UK (Halifax)
ltd.
145 customers were selected on a random basis from sample of 250 populations. The data
collected from the customers assumed the shape of structured open as well as closed ended
70
questionnaire with examiner and with their feedback. Many of the random selected data were
made of 77 females and 68 males. The justification females were preponderant in the sample
population for the region under research. Ages were fewer factors for the criterion due to the fact
that customers were unwilling to disclose their age (Weygandt, 2009). The examiner chooses
98 out of 145 of the respondent which 67% uses the variety of nestle products such as the ideal
108 of the respondent would prefer to continue using the Nestle products in relation to other
product from nestle UK (Halifax) competitors which implies that 97% of the customers are loyal
to nestle UK (Halifax).
72out of 145 of the respondent which is 50% understood the corporate social responsibility
7. Are you aware whether nestle has embarked on corporate social responsibility?
65 out of 145 of the respondents which is 45% are mindful of nestle embarking on corporate
social responsibility plan are not able to identify which program as well as which areas of the
community is affected. This recommends that the communiqué between the customers and nestle
As much as nestle is having increased investment in corporate social responsibility, without good
communication with the community, the CSR project will be viable and the company will be
71
wasting more cash since, good communication between the company and the community is
important since, it will lead to improved understanding between the company objective of
investing in CSR and the need for continued community participation ion CSR objectives. As a
result, good communication would lead to customer’s contentment in CSR hence making the
customers and the community loyal to the company’s product which in turn will make the
Good communication skills would lead to less friction and misunderstanding with the local
authorities within Nestle UK since, the company will be in compliance with the governance
principles and the law. This generally will lead to growth in customer base, improved association
the supplier and the customers hence making the company y to realize a growth in net profit each
financial period. The general implication here is that, where a company investment in CSR as
well as engagement the community, there shall be a drastic growth in net profits (Zu and Song
2008)
The data collected from the secondary sources entails the annual report for nestle UK
72
It can be observed in the above table and gap that there is a strong correlation between the
reported net profit and investment in corporate social responsibility. For instance, in the year
2012, when the value of spent on corporate social responsibility was $212 million. The
company realized a net profit of $10,611 million, growing to 2015 when the company reported
net profit of $14,339 million with an investment in corporate social responsibility with $287
corporate social responsibility and firms financial performance. The annual report can
substantiate the positive correlation as worked out in the previous chapter (Zu and Song 2008).
73
CHAPTER FIVE
5.0 INTRODUCTIONS:
This chapter revisits in brief what was set to attain as stated before in the chapter one of the
research. Chapter what has been done in the preceding chapters? It creates a good foundation for
In chapter 1 and 2 corporate social responsibilities (corporate social responsibility) was defined
by many research in different point of view. the study work was primarily performed to
corporate social responsibility depict substantial impact on the firm financial performance and
secondary in collecting appropriate information for analysis. From the information collected, it
was raised that as corporate social responsibility of nestle UK (Halifax) grows, there was an
Corporate social responsibility is a conventional practice by nestle UK (Halifax) and the society.
74
There has been a growth in amount invested on corporate social responsibility (2012-2015) as
substantiated from the questionnaires that corporate social responsibility depict a sportive effect
position to realize more benefits like the large customer base, customer confidence, better
Other benefits nestle derives from corporate social responsibility - value creation
For the study, it can be realized that corporate social responsibility program embarked by nestle
UK (Halifax) has led to value creation for nestle UK (Halifax) as stakeholders and customers are
contented in doing business with the company. Furthermore, the stakeholders business as
improved significantly and as results leading to enhanced customer loyalty. this was due to on
main development that nestle UK (Halifax) attained which made it more competitive and the
The research found that the as much as nestle UK is invest a lot in the community involvement
program, the customers or the society are not aware of such programs. This is due to the fact that
nestle UK (Halifax) did insufficient to communicate to the society on the programs planned to
5.2 conclusion
75
The notion of corporate social responsibility as turn out to be more and frequent in business
practices as well as customers in the current era expected firms to be communally accountable.
As much as corporate social responsibility is significant to the company, it has in the past not
been very rewarding method for them to engage in these activities. The business of the 21 st
century has no other options other than to execute and report the corporate social responsibility
in their annual reports. Corporate social responsibility procedure commands high level
administration vision as well as support and in at entire levels of the company. Corporate social
responsibility does not provide instant outcome. The similar corporate social responsibility
execution methodology. Corporate companies must adapt the inventive corporate social
responsibility plan into diverse marketing strategy plan to create as well as sustained a
company financial performance, and it depicts a positive impact entailing the good business
associations, goodwill among other benefits. In current competitive market, corporate social
responsibility provides a chance for firms to explore other areas of enhancing profitability.
customers have turn to be very urbane and very much cautious of their environment against the
attitude that companies make more profits, its turns to be authoritative for these companies to
put back into the community through corporate social responsibility plans. As much as the
advantages from corporate social responsibility are more over a long period of time, it is such
that it provides a lot more substantial benefits to the company (Kennedy, 2006).
The benefit entails the customer faithfulness, brand image, enhanced corporate image, market
portion as well as social presence.Unfortunately, all the benefits listed above cannot be
76
substantiated in monetary terms but translate to enhancing the profits for the company as times
goes by. Corporate social responsibility is a capital investment and command broad program
backed by management support to roll out numerous corporate social responsibility programs.
Sums enterprise is not in a position to get involved in such an investment because of factors that
is currently indicted in the research such as the long term return on investment. As to whether
corporate social responsibilities can be a corporate plan for companies to attain its objective in
terms of competitive advantage in the market, its market share is another research that may be
Corporate social responsibility is current the hot study fields for the academe worldwide and for
the reason of this dissertation is to study the association between corporate social responsibility
and financial performance of Nestle UK company. it was apparent that association between the
corporate social responsibility of their workers as well as financial performance depict a strong
correlation which might be because of the concept of social responsibilities to workers being
broadly accepted by Nestle UK as well as the execution of social accountability indeed led to
workers motivations leading to improved productivity and profits to the company. The overall
implication is that, corporate social responsibility investment can only be effective and
achievable to the company where the stakeholders, the customers, the community and the society
are fully involved in business operations within their respective authority. Executives of
multinational corporations have realized that need that the environment in which they do
business be provided for since their intermediary as well as macro environment depict direct
impact on achievement of company’s objectives as well as its mission statement (Watts, 2001).
The aim of all profit making companies, as well as even non-profit making organization, is to
maximize profits as well as minimize cost by way of optimal usage of existing resources to attain
77
the greatest outcome they are in capacity of. Profitability is a significant factor to entire the
government overseas the overall corporate governance of the company as published in the annual
report to ensure that the needs of the community and of the workers are fully met with the
company. this is implies therefore for that, a company to survive in the current economy,
investment in corporate social responsibility shall be mandatory since, many factors are
currently contributing to the need of corporate governance disclosures by companies across the
globe. For instance, the impact of climate change has led to the need for green accounting, safety
.To achieve this, the company act and new accounting standards mandate companies to include
its comprehensive governance report into their annual report to be made public to the users of the
annual reports. This leads to the question of “: is corporate social responsibility be appraised in
monetary terms nowadays? The question is yes since; corporate social responsibility nowadays
has been experienced huge capital investment due to strict rules on accounting standards as well
the changed attitude of customers who currently perceive corporate social responsibility as their
many respondent were not well informed about the company corporate social responsibility
programs that is being initiated in the community which would mean that either the community
are not well informed due to poor communication form the company or the company has made
little effort to engage the community in corporate social responsibility objectives. This depict
some problems that nestle limited need to undertake in the future in order identify the reason for
by the community. This will lead to improved communication between the company and the
community as far as corporate social responsibility is concerned which in turn would develop
78
some positive assertion between the company and the community that is enabling for business
Nestle limited is invest heavily on corporate social responsibility initiatives each financial
period and for that reasons, the company should communicate with the revenue authority in
order to invest in community development are be excused from taxation. The benefit would be to
the community in terms of improved living standards, and health facilities and to the company in
terms of tax exemption. The revenue authority will as well benefit from the corporate social
responsibility initiative by the company since; there will be improved tax compliance by the
company making administration of tax very effective and cooperative. In this regards, tax
exemption would majorly benefit the company subsequently, there shall be little to be taxed from
its profits which would mean that investment in corporate social responsibility would improve
Many workers of nestle considered the company as a safe working environment. This is due to
company investment in safety standards, safety awareness as well as education of its workers on
the need to have safety at all the times. This leads to motivation at place of work hence making
nestle a safer place to work. There is a strong correlation between the workers motivation and
productivity which is notable in nestle UK. Corporate social responsibility does not necessary
mean investment in the community but as well as investment in the staffs of the working in
ensuring that their personal needs is met each day. The correlation between the workers
motivation and financial performance in terms of profitability is strong which would lead to
improved financial performance of the company. It is evident from the responds from
questionnaires that nestle UK is satisfying both the workers of the company and community as
79
This is the secret why nestle UK is performing well in terms of profitability each financial
activities as a different strategy to produce products and services would create a new demand.
businesses who implement differentiation strategy frequently seek after numerous means of
differentiation for instance, ben and jerry's, which distinguishes its items by making
extraordinary flavors, utilizing high quality ingredients, supporting the whole society, and
advancing assorted qualities in the working environment. Corporate social responsibility may
improve satisfaction and to accomplish differentiate products and services. It can there for be
concluded that there is strong correlation between corporate social responsibility and firm
financial performance has depicted with the case study of nestle UK (Crane, 2008).
When businesses engage in social and environmental actions, it suffers additional expenses as
well as decreases the incomes of the businesses. Hence, according to this theory, the higher a
corporation’s engagedin corporate social responsibility level, the lower the level of profitability,
accordingly, increasing the involvement of corporations in social actions could growth the
aggregate resources consumed by the business, and, as a result, decreases the earnings of the
business. Thus, this positions the business in a damaging situation compared to a business which
corporate social responsibility has an undesirable effect on CFP. the implication is that
investment in corporate social responsibility would lead to improved firm financial performance
since, good communication and understanding between the company and the community would
ensure that there is an enabling environment for Nestle UK to do its business and also the
government will have no interference with the operation of the company has far has corporate
80
governance and disclose in its annual reports is concerned. it is as well as eminent that the
comprehensive corporate governance report for nestle UK is attached in the annual report which
show what the company is doing in terms of corporate responsibilities as well as what it intends
5.3 Recommendation
the part provide alternatives measures to be taken into consideration by the academe, the
company as well as the stakeholders and customers as far as corporate social responsibilities is
concerned. Corporate social responsibility commands greater focus as well as more dedication
from companies since it provides assurance on benefits that the company will realize other the
profits. this provides a chance to the corporate world to explore more areas that is deem viable
for the business success in terms of profitability companies are in a position to gain with time
some leverage other than the product and services being provided to the community. The
financial objectives, social as well as environmental accountabilities. At its core, it’s just about
having a set of values as well as attitude that reinforce its daily activities, accountabilities, the
need for fair transaction, consideration for the society, its behavior on customer’s services as well
as its association with the community. in this regards, the environmental aspect of corporate
the company’s business operations, products and facility, getting rid of waste and emission,
capitalizing on effectiveness and productivity of its resources, reward for externalities and tom
reduce dishonesty practices that may unfavorably affect the pleasure of the nation’s resources by
future generation. in the developing worldwide economy, in which the internet, the news media
81
as well as the information uprising shed light on business practice globally, corporations are
often adjudicated based on the their environmental stewardship .The company appreciates that it
The business growth and diversification commands the consideration of the board of shareholder
since it is significant. The business ability to communicate with its shareholders and stakeholders
and establishing the materiality of the company effect is significant to business success.
Shareholders participation and communication is important since, their engagement with nestle
will aid in appraising the important issue as well as shape the criticism with the interest of the
community. The participation is a sign of company engagement and center towards community
issues as well as changes that thus create trust between the stakeholders and the community.
Associates in business as well as consumers need to understand what is within the company. This
accountability of business practice implies that for multinational corporations, corporate social
corporate social responsibility entails projects need to be well planned and executed to have least
impact. This may improve the standards of the recipients. From the survey done, it can be
depicted that some customers or individual of the society are not knowing of some corporate
82
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Appendices:
SECTION A:
INSTRUCTION: Please tick (√) the correct answers from the options provided below.
3. Status/Position: Low level Manager ( ) Middle level Manager ( ) High level Manager ( )
4. How long have you been you been in Nestlé UK? Less than a 7 years ( ) More than 7 years ( )
SECTION B:
INSTRUCTION: Please tick (√) the correct answers from the options provided below.
95
Positive Impact ( ) Negative Impact ( ) Neutral ( )
SECTION C:
INSTRUCTION: Please tick (√) the correct answers from the options provided below.
In the given section SA- Strongly Agree; Agree- A; U- Undecided; D- Disagree; SD- Strongly
Disagree SA 5
SA A U D
1 4 3 2
9 The growth in profit is attributed by
Nestle UK.
12 Corporate Social Responsibility has a
Nestle UK
13 Corporate Social Responsibility by
customer's confidence
96
QUESTIONNAIRE FOR STAKEHOLDERS OF NESTLE UK
Dear Sir/Madam,
The Aim of this questionnaire is to collect data Value Creation through corporate Social
focused at undertaking for academic research purposes. Kindly compete the questionnaire as
honest and keenly as you can and be guaranteed that any information provided shall be held
Section A:
INSTRUCTION: Please tick (√) the correct answers from the options provided below.
SECTION B:
INSTRUCTION: Please tick (√) the correct answers from the options provided below.
4. Which of these other Multinational corporations do you partner with? Unilever ( ) Cadbury
5. Are you cognizant that Nestlé UK has embarked on any CSR project?
Yes ( ) No ( ) Undecided ( )
CSR project?
SECTION C:
INSTRUCTION: Please tick (√) the correct answers from the options provided below.
In the given section SA- Strongly Agree; Agree- A; U- Undecided; D- Disagree; SD- Strongly
Disagree SA 5
SA A U D
1 4 3 2
8 The growth in profit is attributed by
Section A:
INSTRUCTION: Please tick (√) the correct answers from the options provided below.
SECTION B:
INSTRUCTION: Please tick (√) the correct answers from the options provided below.
98
4. 4. Do you use nestle products?
Yes ( ) No ( ) Undecided ( )
Yes ( ) No ( ) Undecided ( )
7. Are you aware whether nestle has embarked on corporate social responsibility?
Yes ( ) No ( ) Undecided ( )
99
ABBREVIATIONS
100