Corporate social responsibility and organizational performance in Qatari companies

Corporate Social Responsibility and Organizational Performance in Qatar

Additional Hypothesis

There is a positive correlation between CSR and public image.

Description of the CSR Construct

In recent years, corporate Social Responsibility (CSR) is a conception that has appealed global consideration and attained a new meaning in the international economy. In line with the World Business Council for Sustainable Development (WBCSD), CSR is the dedication of businesses to add to sustainable economic development, working in tandem with personnel, their households and the local communities (Jamali and Mirshak, 2007). Therefore, the principal notion of CSR is that business firms have a duty to work towards meeting the needs of a greater range of stakeholders. What is more, in general, CSR makes certain that the company makes the most of the positive influences of its business operations on society (Jamali and Mirshak, 2007).

According to Bai and Chang (2015), CSR is in general outlined as activities that spread out past the pure monetary interests of companies to encompass actions purposed to generate social benefits. This fundamentally lays emphasis on CSR activities toward society, which sheds light on the comprehensive and wide-ranging concept of sustainability. Nonetheless, CSR can be directed to particular business groups or individual consumers. The domains of corporate social responsibility are economic, ethical and legal. The economic domain places emphasis on all activities that create a direct or indirect positive economic impact on the firms. This encompasses the maximization of profits or share value. Secondly, the implications of the legal domain are that actions undertaken by companies have to be in agreement with the laws. Based on this domain, the society aspires to perceive firms to realize their economic endeavor under the context of legal demands. Lastly, with regard to the ethical domain, this encompasses the ethical responsibilities undertaken by firms to fulfill the society\'s expectation and all associated stakeholders (Zhu and Zhang, 2012).

This research study incorporates stakeholder theory. A number of the key conceptions linked with this particular theory started out in the 80s period. From the stakeholder perspective, organizations are anticipated to responsibly manage an all-encompassing network of stakeholder interests through progressively penetrable organization confines and recognize a duty of care towards customary interest groups in addition to silent stakeholders like the environment and local communities (Jamali, 2008). Therefore, the stakeholder theory provides a new perspective to establish thinking regarding organizational responsibilities. In particular the theory shifts the focus to considerations past direct profit maximization by proposing that the organization cannot meet the needs of shareholders devoid of satisfying to some extent the needs of other stakeholders. The theory delineates that even when a firm endeavors to provide service to its shareholders as a key concern, the firm\'s likelihood in doing so is influenced by other stakeholders (Jamali, 2008). What is more, it can be argued that an all-encompassing and wide-ranging stakeholder approach is viably sensible as it permits the firm to maximize shareholder wealth and at the same time increase the total value added (Jamali, 2008).

CSR in Qatar

The research article by Abdulla Alnaimi et al. (2012) studied the incidence of Corporate Social Responsibility Reporting (CSRR) disclosure practices of particular public listed companies in Qatar. The results of the study showed that in overall, the level of CSRR in Qatari companies was low, irrespective of whether it was measured with regard to the amount of companies disclosing or with regard to CSRR page share of the annual report. In particular, the studies indicated that with regard to the content of CSRR, majority of the firms disclose information linked to Human Resources, and product developments. In addition, the results of the study indicated that CSRR in Qatar is largely narrative disclosure situated in the report of the chairman. As a result, they provide some primary indication of the prospect that CSRR disclosures in Qatar signify endeavors by firms to present their corporate appearance and to be perceived as accountable corporate citizens.

The link between CSR and Organizational Performance

The amount of literature that discusses the existing link between CSR and organizational performance is substantial and continues to grow. One aspect has been the examination of research studies in elucidating the relationship between CSR and financial performance of a company. Bai and Chang (2015) examines the relationship between the two aspects by bringing into play institutional theory and stakeholder theory, and presenting marketing competence as a significant in-between and intermediary between CSR and firm performance. What is more, the authors employ a provisional standpoint to study the role of market settings in regulating the impact of CSR on marketing competence. With the study being based on China, the results of the study indicate that marketing competence effusively intermediates the effects of all CSR activities on firm performance. What is more, the results indicate that competitive force deteriorates the positive influence of CSR toward personnel on marketing competence, whereas it reinforces the positive influence of CSR toward society on marketing competence. What is more, turmoil within the market improves the positive correlation between CSR toward consumers and marketing competence.

Valmohammadi (2014) examined the understandings of a CSR domain and conceptions in the context of Iranian organization in conjunction with a comprehensive analysis of CSR drivers. In the research study, the author laid emphasis on a code of conduct referred to as International Organization for Standardization (ISO) 26000, narrowing the examination to seven key issues, including human rights, labor practices, organizational governance, consumer issues, fair operating practices and community involvement and development. Taking into account responses obtained from 105 Iranian organizations, the results of the study indicated that community participation and improvement plays a significant role in augmenting organizational performance of organizations.

Tang et al. (2012) examines the relationship between CSR and corporate financial performance and suggest that firm profits are fashioned by how companies engage in CSR. By employing absorptive capacity theory and correlated standpoints for instance time compression diseconomies, asset mass efficacies, and path dependence theory, the authors make the argument that when a firm participates in CSR gradually and dependably, concentrates on associated CSR magnitudes, and begins with inner measurements of CSR, the firm\'s financial performance will be improved. In particular, results of the research study indicate that there is increased benefit for firms when they implement a CSR engagement approach that is reliable, encompasses associated extents of CSR, and commences with features of CSR that are more core to the firm.

Rettab et al. (2009) examines the relationship between CSR and organizational performance by bringing into play the impact of CSR in emerging economies. The study encompasses responses from 280 companies operating in Dubai and the results of the research study indicate that there exists a positive relationship between CSR and all three measures of organizational performance, which are employee obligation, financial performance and firm reputation. More so, the results of the study underpin the amassing body of empirical support for the positive impact of CSR on performance and challenge the prevailing supposition that, taking into account the weak institutional structure in emerging economies, CSR activities waste assets and compromise the competitiveness of firms.