View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Anglia Ruskin Research Online Anglia Ruskin University Faculty of Education Corporate Social and Financial Performance: The Case of Companies in Israel Yeshayahu (Shaike) Marom Thesis in partial fulfillment of the Requirements of Anglia Ruskin University For the degree of DOCTOR OF PHILOSOPY Submitted: August 2010 ACKNOWLEDGEMENTS Special thanks to my supervisors: Prof. Vernon Trafford, ARU, Chelmsford, UK: Your wide knowledge and abstract thinking lighted my way into doctorateness thinking. Dr. Andy Armitage, ARU, Chelmsford, UK: Your practical advice helped me through the hard work of Ph.D. thesis. To the Anglia Ruskin University staff that was very supportive throughout my research: Dr. Gill Robinson, ARU, UK Professor. Gina Wisker, ARU, UK To the Israeli Ph.D. coordinators: Mr. Dani Shenkar Mr. Avishai Tal i TABLE OF CONTENTS ABSTRACT ............................................................................................................ viii CHAPTER 1 INTRODUCTION................................................................................1 CORPORATE SOCIAL RESPONSIBILITY .........................................................................1 CSR IMPACT ON FINANCIAL PERFORMANCE ...............................................................2 PREVIOUS EMPIRICAL RESEARCH ................................................................................5 CONTEXT SETTING ......................................................................................................5 STRUCTURE OF THE THESIS .........................................................................................9 CHAPTER SUMMARY..................................................................................................10 CHAPTER 2 CORPORATE SOCIAL RESPONSIBILITY .................................11 INTRODUCTION ..........................................................................................................11 THE CONCEPTUAL DEVELOPMENT OF CSR ...............................................................11 THE 3-D MODEL........................................................................................................13 THE EVOLUTION OF CSR SINCE THE 1980S ...............................................................18 CORPORATE SOCIAL PERFORMANCE .........................................................................25 CHAPTER SUMMARY..................................................................................................26 CHAPTER 3 THE IMPACT OF SOCIAL RESPONSIBILITY ON FINANCIAL PERFORMANCE..............................................................................27 INTRODUCTION ..........................................................................................................27 THE TRADE-OFF HYPOTHESIS....................................................................................28 THE STAKEHOLDER THEORY OF THE FIRM ................................................................30 STAKEHOLDER MANAGEMENT ..................................................................................34 SOCIAL IMPACT HYPOTHESIS ....................................................................................37 RESOURCE-BASED VIEW ...........................................................................................38 NON-LINEAR RELATIONSHIP......................................................................................40 THE UNIFIED THEORY ...............................................................................................41 CHAPTER SUMMARY..................................................................................................44 CHAPTER 4 EXTANT STUDIES ...........................................................................45 INTRODUCTION ..........................................................................................................45 THEORETICAL PERSPECTIVE ......................................................................................45 OPERATIONALISATION AND MEASUREMENT OF CSR ................................................51 ii OPERATIONALISATION AND MEASUREMENT OF CFP.................................................64 RESULTS OF PAST EMPIRICAL RESEARCH..................................................................74 CHAPTER SUMMARY..................................................................................................76 CHAPTER 5 CONCEPTUAL FRAMEWORK AND THE RESEARCH INQUIRY............................................................................................77 INTRODUCTION ..........................................................................................................77 THE RESEARCH PROBLEM .........................................................................................77 RESEARCH PURPOSE ..................................................................................................77 MAPPING OF THE RESEARCH AREA ...........................................................................79 THE FOCAL THEORY..................................................................................................80 BRIDGING THEORY AND PRACTICE............................................................................82 THE CONCEPTUAL FRAMEWORK ...............................................................................84 CHAPTER SUMMARY..................................................................................................87 CHAPTER 6 RESEARCH DESIGN .......................................................................88 INTRODUCTION ..........................................................................................................88 LINKING THE PARADIGMS..........................................................................................88 METHODOLOGY.........................................................................................................88 INDUCTIVE AND DEDUCTIVE RESEARCH.....................................................................89 QUANTITATIVE AND QUALITATIVE RESEARCH ...........................................................90 THE CHOICE OF METHODOLOGY FOR MY RESEARCH...................................................91 CROSS-SECTIONAL RESEARCH ..................................................................................93 METHODS ..............................................................................................................95 SAMPLE ..............................................................................................................97 ETHICS CONSIDERATION............................................................................................99 DATA ACCESS AND COLLECTION...............................................................................99 NUMBER OF CASES IN EACH GROUP OF CSR...........................................................101 TYPE OF DATA.........................................................................................................102 SOURCE FOR CSR DATA..........................................................................................103 SOURCE FOR CFP DATA ..........................................................................................104 CHAPTER 7 FINDINGS ........................................................................................106 INTRODUCTION ........................................................................................................106 TESTING OF THE FIRST HYPOTHESIS ........................................................................106 RESULTS OF TESTING FOR THE FIRST HYPOTHESIS ..................................................108 TESTING OF THE SECOND HYPOTHESIS ....................................................................112 iii RESULTS OF TESTING FOR THE SECOND HYPOTHESIS ..............................................114 TESTING THE INFLUENCE OF COMPANY SIZE ON CSR .............................................117 TEST EVALUATION ..................................................................................................118 CHAPTER SUMMARY................................................................................................121 CHAPTER 8 INTERPRETATION OF THE RESEARCH ................................122 INTRODUCTION ........................................................................................................122 THE INTERPRETIVE APPROACH................................................................................122 CONSISTENCY AND RIGOUR.....................................................................................123 INTERNAL CONSISTENCY .........................................................................................124 CHAPTER SUMMARY................................................................................................128 CHAPTER 9 CONCLUSIONS...............................................................................129 INTRODUCTION ........................................................................................................129 PURPOSES OF THE RESEARCH ..................................................................................129 FACTUAL CONCLUSIONS..........................................................................................131 CONCEPTUAL CONCLUSIONS ...................................................................................132 A CRITIQUE ............................................................................................................134