Study of the effect of corporate social responsibility on increasing the agility and efficiency of service companies

Document Type : Original Article

Author

Department of Social Sciences, Faculty of Humanities, Bakı Dovlət Universiteti, Baku, Azerbaijan

Abstract

This study explores the role of Corporate Social Responsibilities (CSR) in maximizing the firm’s profitability for sustainable competitive advantage in Indonesia. CSR refers to the obligation of corporations to consider not only shareholders’ interests, but also the interests of other stakeholders, like employees, customers, suppliers and communities directly affected by corporate actions. CSR nowadays is approached as a shared value, recognizing that not only the conventional economic needs but also societal needs define the market. A corporate social agenda has moved from simply helping to reduce social and environmental harm to improving social conditions as a way to strengthen its core business strategy to maximize its profitability for a sustainable competitive advantage. This study uses personal interview with respondents of selected companies from various industries in Indonesia. The interviews’ results are emphasizing the four major aspects which explains how exactly is the role of CSR in the firm’s profit maximization. First is the company’s brand image will be affected by the CSR, leading the company to accordingly gain the trust from the customers, the customers’ trust is the second aspect. Third is by doing CSR, the sense of proudness towards the company felt by the employees will increase, this will increase the employee’ productivity. Last but not least is the enrichment of the human beings across the company, this will create a harmonize atmosphere and simply promote a healthy society. In conclusion, these four major aspects will interact with one another and influence the profit maximization, which means eventually will as well act as a sustainable competitive advantage for the company.

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