Study on Strategic CSR and Managerial Innovation Performance

Abstract

A company should be concerned about social responsibility as well as economic profit for sustainable growth. CSR(Corporate Social Responsibility) has become an issue recently as concepts of strategic CSR or creating shared value(CSV), not only creating social value but also affecting corporate profit, has been important. However, the impact of changed direction of CSR on business strategy management and its various outcomes have not been studied much yet. Thus, this paper aims to suggest a frame for CSR strategy by developing a hypothesis on sustainable corporate growth mechanism and verifying it through empirical analysis. Firstly, the study verifies the relation between main causes of CSR and financial result by using structural equation and factorial analysis. A company chooses R&D and technical commercialization among business management strategies as well as CSR for sustainable growth. Thus, it tries to analyze the impact of main management strategies, such as CSR, R&D capability and technical commercialization capability on corporate management result in multiple perspectives. The correlation among management strategies, CSR and business results are analyzed through factorial analysis and path analysis. It tries to suggest strategic management direction for corporate sustainable growth by grasping positive and negative relations, affecting business results, at the same time, based on the analysis result. According to the result, it is analyzed that traditional CSR might have a negative impact on business results, among various management strategies, and organization learning of R&D capability, technical strategy planning and technical process capability of technical commercialization capability have positive impacts on the result. Furthermore, it is analyzed that internal motivation of CSR, organization learning of R&D capability, technical strategy planning of technical commercialization capability positively affect traditional CSR and R&D concentration and external cause of CSR negatively affect it. In addition, analysis result on strategic CSR shows that R&D concentration of R&D capability and technical strategy planning of technical commercialization and external motivation of CSR of CSR motivation might have positive impacts on business results. This study discusses implication, affecting decision making on CSR, R&D, directivity and impact of technical commercialization and future business results, based on empirical results, for corporate sustainable business. In the second study, the relation between CSR, CSR fitness and business results is analyzed. One of the methods for judging whether CSR is strategically fulfilled is to discuss whether CSR activity is suitable or not. The concept on whether CSR activity is suitable is CSR fitness and, if CSR fitness is high, corporate result would be positively affected. Most studies on CSR and various corporate outcomes have studied relation between CSR and economical result or financial product and few studies have analyzed them synthetically. Through this study, relations among corporate financial result, social outcome, innovative fruit and organization performance are synthetically analyzed. The analyzed result shows that CSR fitness has a positive impact on all of financial result, social outcome, innovative fruit and organizational performance and economical result of CSR also positively affect financial, social, innovative and organizational outcome and philanthropic responsibility and ethical responsibility of CSR has a positive effect on innovative performance. In the third study, we analyzed the R&D and financial performance using the KEJI index, a substitute for CSR activities from 2012 to 2014. First R&D intensity had a positive effect on ROA. Corporate R&D and CSR are very important resources. This resource not only enhances the competitiveness of the firm, but also positively contributes to society. Second, we analyze the impact of CSR and R&D on each industry. Manufacturing firms R&D has had a positive impact on CSR, and non-manufacturing firms R&D has not found any particular impact. In manufacturing firms R&D activities consist of product and manufacturing innovation, and CSR-related activities are affected by these products and services. Third, the impacts on CSR and financial performance were analyzed by dividing the CSR as a whole and individual evaluation items. As a result, although the total value of CSR did not have a meaningful result, soundness and fairness among CSR factors influenced financial performance. Examples of strategic CSR of main companies are analyzed in the third study. The implication of strategic CSR is drawn through Vodafone, foreign carrier, and KT, domestic carrier, which are selected as excellent cases of strategic CSR. This paper suggests followings for corporate management, through three studies. This paper provides a few political and business implications. Firstly, for corporate sustainable business, financial, social, innovative and organizational outcome can be improved through static CSR. For strategic CSR, technical commercialization capability and R&D concentration should be improved. This paper has a great significance of academically suggesting a frame of main factors and outcomes for corporate sustainable growth and helping companies understanding on value of CSR strategy and providing philosophical base.