Abstract
The comparison of corporate social performance with corporate financial performance has been a popular field of study over the past 25 years. The results, while broadly conclusive of a positive relationship, are not entirely consistent. In addition, most of the previous studies have concentrated on large-scale cross-industry studies and often with a single variable for corporate social performance, in order to produce statistically significant results. This weakens the richness of understanding that might be obtained from a single industry study with multiple social variables, which would also allow investigation of inter-relationships between individual and sub-sets of social performance measures and between individual and sub-sets of social performance and financial performance measures. There have also been criticisms that the results lack a rigorous theoretical basis, and the paper demonstrates clearly how stakeholder theory must form the basis for this area of research. Following a review of the literature this paper presents the initial findings from a study of the U.K. Supermarket industry which suggest that contemporaneous social and financial performance are negatively related, while prior-period financial performance is positively related with subsequent social performance. Positive relationships between both age and size of the company with social performance are also found.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Arlow, P. and M. Gannon: 1982, ‘Social Responsiveness, Corporate Structure, and Economic Performance’, Academy of Management Review 7(2), 235–241.
ASA: 1999, ‘ASA Adjudications’, http:://www.asa.org.uk, 1 December 1999.
Berman, S., A. Wicks, S. Kotha and T. Jones: 1999, ‘Does Stakeholder Orientation Matter? The Relationship between Stakeholder Management Models and Firm Financial Performance’ Academy of Management Journal 42(5), 488–506.
Bowman, E. and M. Haire: 1975, ‘A Strategic Posture Toward Corporate Social Responsibility’, California Management Review 18(2), 49–58.
Christian Aid: 1999: Taking Stock. How the Supermarkets Stack Up on Ethical Trading (Christian Aid, London).
Collier, J.: 1998, ‘Theorising the Ethical Organization’, Business Ethics Quarterly 8(4), 621–654.
Cooke, T. E.: 1989, ‘Disclosure in the Corporate Annual Reports of Swedish Companies’, Accounting and Business Research (Spring), 113–124.
Cottrill, M.: 1990, ‘Corporate Social Responsibility and the Marketplace’, Journal of Business Ethics 9, 723–729.
Donaldson, T. and L. Preston: 1995, ‘The Stakeholder Theory of the Corporation: Concepts, Evidence and Implications,’ Academy of Management Review 20(1), 65–91.
ETI: 1999, http:://www.ethicaltrade.org, 1 November 1999.
Griffin, J. and J. Mahon: 1997, ‘The Corporate Social Performance and Corporate Financial Performance Debate. Twenty Five Years of Incomparable Research’, Business and Society 36(1), 5–31.
Harrison, J. and R. Freeman: 1999, ‘Stakeholders, Social Responsibility, and Performance: Empirical Evidence and Theoretical Perspectives’, Academy of Management Journal 42(5), 479–485.
Herremans, I., P. Akathaporn and M. McInnes: 1993, ‘An Investigation of Corporate Social Responsibility Reputation and Economic Performance’, Accounting, Organizations and Society 18(7/8), 587–604.
ITC: 1997, Television Advertising Complaints Report (ITC, London).
ITC: 1999, ‘ITC Advertising Complaints Reports’, http:://www.itc.org.uk.
MacIntyre, A. 1985, After Virtue (Duckworth, London).
Marston, C. and P. J. Shrives: 1991, ‘The Use of Disclosure Indices in Accounting Research: A Review Article’, British Accounting Review 23(3), 195–210.
McGuire, J. B., A. Sundgren and T. Schneeweis: 1988, ‘Corporate Social Responsibility and Firm Financial Performance’, Academy of Management Journal 31(4), 854–872.
Moore, G.: 1997, ‘Corporate Character: The Application of Virtue Ethics to Business’, in G. Moore (ed.), Business Ethics: Principles and Practice (Business Education Publishers, Sunderland, U.K.), pp. 61–80.
Moore, G.: 1999, ‘Tinged Shareholder Theory: Or What's So Special About Stakeholders?’, Business Ethics: a European Review 8(2), 117–127.
Moore, G.: Forthcoming, ‘Implications of the Practice-institution Distinction: MacIntyre and the Application of Modern Virtue Ethics to Business’, Business Ethics Quarterly.
Moskowitz, M.: 1972, ‘Choosing Socially Responsible Stocks’, Business and Society Review 1, 72–75.
Moskowitz, M.: 1974a, ‘Social Responsibility Portfolio 1973’, Business and Society, 15 January, 1.
Moskowitz, M.: 1974b, ‘46 Socially Responsible Corporations’, Business and Society, 2 July, 8.
Moskowitz, M.: 1975, ‘Profiles in Corporate Responsibility’, Business and Society Review (Spring), 28–42.
Pava, M. and J. Krausz: 1996, ‘The Association between Corporate Social-responsibility and Financial Performance: The Paradox of Social Cost’, Journal of Business Ethics 15, 321–357.
Preston, L. and D. O'Bannon: 1997, ‘The Corporate Social-financial Performance Relationship. A Typology and Analysis’, Business and Society 36(4), 419–429.
Porter, M.: 1980, Competitive Strategy (Free Press, New York).
Roberts, R.: 1992, ‘Determinants of Corporate Social Responsibility Disclosure: An Application of Stakeholder Theory’, Accounting, Organizations and Society 17(6), 595–612.
Stanwick, P. and S. Stanwick: 1998, ‘The Relationship between Corporate Social Performance, and Organizational Size, and Environmental Performance: An Empirical Examination’, Journal of Business Ethics 17(2), 195–204.
Trotman, A. and G. Bradley: 1981, ‘Associations between Social Responsibility Disclosure and Characteristics of Companies’, Accounting, Organizations and Society 6(4), 335–362.
Ullmann, A.: 1985, ‘Data in Search of a Theory: A Critical Examination of the Relationship among Social Performance, Social Disclosure and Economic Performance of U.S. Firms’, Academy of Management Review 10(3), 540–557.
Verschoor, C.: 1998, ‘A Study of the Link between a Corporation's Financial Performance and its Commitment to Ethics’, Journal of Business Ethics 17(13), 1509–1516.
Wokutch, R. and B. Spencer: 1987, ‘Corporate Saints and Sinners. The Effects of Philanthropic and Illegal Activity on Organizational Performance’, California Management Review 29(2), 62–77.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Moore, G. Corporate Social and Financial Performance: An Investigation in the U.K. Supermarket Industry. Journal of Business Ethics 34, 299–315 (2001). https://doi.org/10.1023/A:1012537016969
Issue Date:
DOI: https://doi.org/10.1023/A:1012537016969