Impact Of Corporate Social Responsibility On Financial Performance And Brand Imaging Of Business: A Study Of Ghanaian Firms

Businesses in their quest for financial growth are incessantly innovating and upgrading old ways to make the best possible product at a cheaper cost. This goal of excellence and pursuit of financial growth does not always lend itself to social advancement and it sometimes has detrimental consequences to the environment, unhealthy work places, and exposure to toxic substances, urban decay and other similar issues.Business owners have always been at the receiving end of public criticism for being single minded about their need to maximize value at the expense of public good. Consumerism and pressure from the other environmentalist have forced managers to factor in Corporate Social Responsibility(CSR) activities in their profit maximization goal. As a result of this external pressure CSR has become a salient aspect in strategic decision making, coupled with the fact that they want to avoid financial scandals as well as not lose investor confidence.CSR has emerged as a view that can add to financial performance of a firm and it is imperative for corporate decision makers to be mindful of the environment which will greatly affect the company’s long term financial performance. Firms vary in their approach to implementing CSR in strategic businesses practices. This variation come as result of a firm’s size operating industry, stakeholder demands, historical CSR engagement, level of diversification, research and development and labor market conditions.There exist two different school of thoughts, some believe that benefits are accrued with good reputation opposed to this view are the ones who believe that the firm’s costs of adhering to ethical standards will translate into higher product prices, a competitive disadvantage and lower profitability. Even after deep exploration of Corporate Financial Performance(CFP) – Corporate Social Performance(CSP) relationship, the empirical evidence to date is somewhat conflicting.Globalization and liberalization in the Ghanaian economy has altered corporate goals from a socio-economic focus towards increasing shareholders to the benefits of various stakeholders. Irrespective of the studies that have taken place in the developed worlds, there is paucity of such studies in Ghana. This studies’ main thrust to explore and gain insight into the problem and grasping the core issues and provide a definitive answer to the problem.This study has a sole purpose of investigating the relationship that ensues between CSP andCFP. Whether this relationship is positive or negative is tenuous. Among the above objective is to derive the perception of Corporate Social behavior towards its stakeholders along with justifying its triple bottom line benefits while filling the literally gap through replicating and extending previous findings on social and financial performance of firms. The study also attempts to analyze in detail the aforesaid relationship; it also discusses the effectiveness of social and financial performance along with competitive performance of sample Ghanaian companies. The results identify critical Ghanaian and determine their importance in molding the CSP-CSP relationship on which further sectors identified as weak may be carried out.