CSR AND COMPANY PERFORMANCE

Impact of Corporate Social Responsibility on Company Performance

Table of Contents

Introduction3

Hypotheses3

Analysis3

Analysis of Hypothesis 1, 2 & 33

Analysis of Hypothesis 47

Hypotheses Assessment Summary10

HO1: There is an impact of CSR on market to book value.10

HO2: There is an impact of CSR on total assets of company.10

HO3: There is an impact of CSR on return on capital employed.10

HO4: The means of manufacturing, services and primary for corporate social responsibility are significantly different from each other.11

Conclusion11

Introduction

The study is related to the impact of corporate social responsibility on company performance. In this relation, JP Drew should focus on the factors that are crucial in determining the company's performance, for that reason, in this particular study, different sectors that include manufacturing, services and primary are incorporated, in addition to market to book value, return on capital employed and total assets of company. Keeping this in view, it is important that Directors of JP Drew should analyze the impact of CSR on these determining factors that ultimately reflects that performance of the company. In relation to this, JP Drew should put emphasis on the following hypotheses, which will facilitate in finding the impact of CSR on company performance:

Hypotheses

HO1: There is an impact of CSR on market to book value.

HO2: There is an impact of CSR on total assets of company.

HO3: There is an impact of CSR on return on capital employed.

HO4: The means of manufacturing, services and primary for corporate social responsibility are significantly different from each other.

Analysis

Analysis of Hypothesis 1, 2 & 3

Descriptive Statistics

Mean

Std. Deviation

N

Index to represent the extent of CSR activities

38.4560

6.71805

500

Market to book value

2.3729

.35809

500

Total assets of company, £ million

2.1057E5

63372.01724

500

Return on capital employed, percent

39.0182

6.88857

500

The above table is showing the mean and standard deviation of the variables which is considered as the most vital values. It is found that the mean of Total assets of company, but the standard deviation of the variables were also high, in comparison to other independent variables.

Correlations

Index to represent the extent of CSR activities

Market to book value

Total assets of company, £ million

Return on capital employed, percent

Pearson Correlation

Index to represent the extent of CSR activities

1.000

.709

.052

.584

Market to book value

.709

1.000

- .009

.405

Total assets of company, £ million

.052

- .009

1.000

.070

Return on capital employed, percent

.584

.405

.070

1.000

Sig. (1- tailed)

Index to represent the extent of CSR activities

.

.000

.121

.000

Market to book value

.000

.

.423

.000

Total assets of company, £ million

.121

.423

.

.059

Return on capital employed, percent

.000

.000

.059

.

N

Index to represent the extent of CSR activities

500

500

500

500

Market to book value

500

500

500

500

Total assets of company, £ million

500

500

500

500

Return on capital employed, percent

500

500

500

500

The above table correlation table is indicating that corporate social responsibility has correlation with market to book value and return on capital employed. The reason such is that the level of significance is under 0.05 reflecting that correlation between the variables. Moreover, the Pearson Correlation value shows that for market to book value and return on capital employed, the value is 0.709 and 0.584, indicating positive correlation between the variables. In other words, it can be said that as the corporate social responsibility increases then the market to book value or the return on capital employed increases that is companies' performance will also ...