engleski

Corporate social responsibility and business success in Croatian companies

In recent years, a Corporate Social Responsibility (CSR) practice has in light of occurring economic, social and climate changes grown in scope and importance. Corporate social responsibility is the voluntary commitment by company managers to integrate social and environmental considerations into their business operations. Alongside with companies CSR nonfinancial benefits, such as: increase in reputation, higher employee retention, and encouraging innovation, it is useful to demonstrate the business success measured by financial ratios. Recent research suggests that there are three directions in which CSR affects the company: positive, neutral, or negative. Our task is to examine which direction is dominant in Croatian CSR companies, and present findings of their success. We assume that CSR companies attain above average financial results. In our research we are using yearly financial reports as source of data, and have calculated Key Performance Indicators (KPI’s) to measure the level of success. Our sample encompasses CSR Croatian companies, and compares them with their respective branches/ industries KPI’s. Our findings indicate that companies which have commendable CSR practices are on average displaying higher level of liquidity, productivity, efficiency and profitability and are more successful according to the examined KPI’s compared with their respective branch/ industry competitors. Thus, without going into the discussion which was the primary driver of such results (the success, or the CSR), the results for CSR companies indicate above average financial results, and therefore support the view that success and CSR are going hand in hand.

Corporate social responsibility (CSR); Croatia; financial indicators; CSR benefits

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