Research On The Effect Of Corporate Social Responsibility On The Efficiency Of Working Capital Management

Working capital is one of the most important fund formulas in the enterprise. And the management of the working capital is also important in financial management. Either the size and composition of working capital or turnover and flow of the working capital has tremendous impact in daily business of the enterprise. In recent years the focus on funds management is from the funds itself to turnover of the funds, from inside of the balance sheet to both sides of it, from isolated management to systematic management. The index to evaluate the efficiency of the working capital management is changed from cycle turnover of one flow capital to it of integrated operation capital as well as the assess method from the only math to systematic thinking based on the supply chain management. On the other hand, daily operations should be far away from the viewpoint that the economic benefit is the most important goal, and perform social responsibility, otherwise daily operations will be impacted even destroyed.According to the stakeholder theory the enterprise can not survive without the support from all stakeholders, for example the funds from shareholders and creditors, the human capital from personnel, and the living capital from consumers by buying the product and service as well as the market and legal assurance from the community and government, the plant from the environment. The enterprise should thus return the society from so many kinds of capital—corporate social responsibility. The operation of the enterprise is actually a process to dispose different kinds of resources from stakeholders. And the revolution of the working capital of the enterprise is in fact, the process of the association of all kinds of resources.This article based on the supply chain management theory regarding classifying of the working capital and evaluation of the management efficiency combining the theory of decision making psychology is to discuss the effect on the behavior of the enterprise in social responsibility by the behavior of the stakeholders and further to discuss the consequence on the change of the management efficiency of the working capital. After the theory part of analyzing that how the performance of the social responsibility of the enterprise influence the management efficiency of the working capital, the analysis and opinion of the context is testified by the questionnaire survey and case study. The questionnaire survey indicates that in general when the performance of the social responsibility of the enterprise is good, the stakeholders will make the decision which is oriented to keep the intimate relationship between so that to be good for the enterprise operation and to improve the management efficiency of the working capital while individually the decision will be less oriented when the decision will deteriorate its own important benefits. Then we analyze Foton and Jiangling Motors as case study. At last we can conclude that when the enterprise perform its own social responsibility and target as to maximize the value of the beneficial relevant objects there will be remarkable impact on improving the management efficiency of the working capital. Moreover the article gives the advices on the enterprise operation so that the theory can apply to the realistic use.