The Impact of Corporate Social Responsibility on the Profitability of Listed Retailers: Indications from the Johannesburg security exchange (JSE).

Abstract

Compliance to the corporate social responsibility (CSR) by firms has been more of a regulatory requirement rather than a social obligation. While a few firms have entrenched policy structure to actuate meaningful responsiveness to their operating community, compliance by a host of other companies to the statutory provision in this regard has been proven to be difficult. This research examines the extent to which the adoption of CSR affects the profitability of the listed retailing firms on the Johannesburg security exchange (JSE). This research applies regression analysis as well as analysis of variance (ANOVA), using SPSS statistical package, to analyse the relationship between the financial performance of these firms, and their CRS responsiveness. The finding suggests that CRS engenders good perception of organisations by consumers and regulatory bodies in a way that favourably improves the organisation’s corporate financial performance (CFP). This paper looks at the profitability of organisations as regards CSR from two perspectives namely, the consumer loyalty and consumer bias that creates favourable corporate goodwill of being socially responsible, and the possible financial savings from spending less on ‘forced’ social responsibility.