Mapping the linkage between corporate social responsibility and organizational performance along with examining the moderating effect of ownership

• Published date: 01 February 2023
• Author: Ajai Pal Sharma,Purnima Singh
• Date: 01 February 2023
• DOI: http://doi.org/10.1002/pa.2836

RESEARCH ARTICLE

Mapping the linkage between corporate social responsibility

and organizational performance along with examining

the moderating effect of ownership

Ajai Pal Sharma | Purnima Singh

Central University of Haryana, Mahendragarh,

India

Correspondence

Ajai Pal Sharma, Central University of Haryana,

Mahendragarh 123031, India.

Email: ajaipalsharma@gmail.com

Environmental and social initiatives taken by organizations under corporate social

responsibility (CSR) have attracted stakeholder's attention and global resonance in

the recent times. Alike Western countries, the concept of corporate social responsi-

bility is not new in India rather it has been imbibed in the tradition of Indian society

to donate voluntarily for social causes. As a result, a paradigm shift has been noticed

where “voluntarism”in CSR has got replaced with a mandatory obligation. This has

been made mandatory through an amendment of new Companies Act, 2013. The

current study through empirical observations emphases on examining the impact of

CSR related activities on the organizational performance with the moderating effect

of organizational ownership. A model is proposed and tested using SEM through

AMOS. Data were collected from 265 respondents including senior CSR managers

and other working professionals of select organizations. The results show a signifi-

cant and positive relationship between CSR activities and organizational perfor-

mance. It is also found that organizational ownership has no moderating effect on

the relationship between activities conducted under CSR and the performance of the

organizations. The analytical finding of the study has a practical implication for the

managers of various organizations in the Sonbhadra district of Uttar Pradesh, India.

KEYWORDS

corporate social responsibility, organizational performance, social welfare

1|BACKGROUND

In the recent past, organizational commitment towards environmental

and social improvement initiatives have been at the forefront of cor-

porate management, better known as corporate social responsibility

(CSR) (Mozes et al., 2011). The concept of CSR is associated not only

having cordial relationship with corporate, but to its stakeholders,

including clients and the society. With the dawn of globalization,

problems related to environmental pollution and shortage of

resources have increased around the world. To deal with this problem,

it has now become a common practice for organizations to demon-

strate responsibility through environment-friendly practices in their

business operations (Gao, 2011). Although, the attention to the issue

of CSR has increased in the developed economies, but observed low

in the developing economies (Gao, 2011). India, being one of the fast

emerging economies of the world, has become a center of attraction

for global corporate. Therefore, the study related to CSR in Indian

organizational context becomes more pertinent. While studying the

organizational commitment of Iranian industries, Valmohammadi

(2011) considered CSR as a strategic tool to improve the corporate

identity and market share of any country. Corporate identity creates a

unique and differentiated organizational image in the business envi-

ronment where it operates (Simoes et al., 2005). By taking the motiva-

tion from the study of Valmohammadi (2014) on the impact of CSR

practices on organizational performance, this study has been carried

out in Indian context.

Received: 19 March 2021 Revised: 30 June 2022 Accepted: 7 July 2022

DOI: 10.1002/pa.2836

J Public Affairs. 2023;23:e2836. wileyonlinelibrary.com/journal/pa © 2022 John Wiley & Sons Ltd. 1of15

https://doi.org/10.1002/pa.2836