Strategic intent as a moderator of CSR and organizational performance

5 Does Strategic Intent Moderate the Link between Corporate Social Responsibility and Organizational Performance? A conceptual analysis Literature Review A Contingency Approach in the CSR-Performance Link Ganescu’s (2012) study puts forward a model of CSR performance assessment using a contingency approach. The study shows that internal and external contingent variables (from the business model to the culture of the organization, its leadership, total quality management, diversity, etc.) all play a part in the enhancement of CSR performance. The application of the model developed by Ganescu (2012) also facilitates the ability to gauge organizations on their social performance in emerging markets. Ganescu (2012) notes that “corporate social performance can be determined based on: CSR principles guiding company activities, corporate social responsiveness processes and results” and that “social policies define the values, beliefs and goals of the organization in connection to social environment” (p. 1000). In other words, there is a strong CSR-performance link that can be established through the contingency approach to social performance. CSR and Organizational Performance Link The link between CSR and organizational performance is examined by Reverte et al. (2016) and by Petrenko et al. (2016) respectively. Reverte et al. (2016) show in their assessment of 133 eco-friendly Spanish companies that there are “positive and significant direct effects of corporate social responsibility on both innovation and organizational performance across all groups of companies (i.e., manufacturing vs. non-manufacturing, proactive vs. non-proactive, smaller vs. larger and younger vs. older firms” (p. 2870). Petrenko (2016) et al. find that CEO narcissism can have a positive effect on quality and profile of organizational CSR performance. The researchers also find that CEO narcissism can lessen the effect of CSR on performance. The study shows that there is a substantial link between an organization’s leadership, its CSR, and its organizational performance. The Contingent Role of Strategic Intent: A proposed model The role of the leader in an organization and the leader’s impact on strategic intent can be seen in the study Chen et al. (2016). The study finds that by rationally analyzing strategic intent, a firm’s expansion strategy can be impacted to a large degree. Contingent role of strategic intent indicates that leadership is a major factor in how a firm’s long term objectives and goals are elucidated, and a possible model for enhancing the contingent role of strategic intent is to allow leaders to verbalize and embody this intent in their manifest dealings with the firm from a top-down perspective. A proposed model would show that leadership is responsible for ultimately guiding and directing the organization through the strategic application of the overall strategic vision for the firm. This application must be moderated by an element of corporate social responsibility to ensure its enhancement. Corporate Social Responsibility Engagement Strategy Moderates the CSR–Financial Performance Relationship As Tang et al. (2012) assert in their study that an organization’s profits are impacted by the methods the company utilizes to implement its corporate social responsibility policy. The researchers note that other studies on CSR and corporate financial performance relationships examine different variables that stem from contextual and organizational areas. What Tang et al. (2012) emphasize is the lack of critical attention on how CSR policy can be used as an engagement strategy. Tang et al. (2012) focus on absorptive capacity theory and other approaches (like time compression diseconomies, asset mass efficiencies, and path dependence theory) to show that a company that implements a CSR policy over time and with consistency, while establishing CSR dimensions and setting internal dimensions of CSR and corporate financial performance will ultimately be much improved. The researchers’ longitudinal study examines 130 firms over a 12 year period from 1995 to 2007, and found that most companies benefit significantly from a CSR engagement strategy that is consistent over time and that expands CSR internally so as to make its dimensions more inclusive of everything the company does. In the end, the company will reap considerable financial benefits from the implementation of such a policy. Hypotheses 1) Developing and implementing a CSR policy that is both based on community values that are recognized and affirmed within the firm’s strategic markets and consistently applied internally and externally for a firm, will see improvement in its corporate financial performance over the same time duration. 2) The link between organizational performance and corporate social responsibility can be measured and predicted by examining the basis of the CSR policy in terms of community values, the extent to which those values are shared among target markets, the extent to which those values are internalized and embodied by the company, and the extent to which leadership shows via strategic intent the manner in which those values will serve the firm’s long term perspective.