Internal Control? Regulation And Corporate Social Responsibility

The lack of effective market mechanism and institutional constraints lead to the disappointing performance of corporate social responsibility.Studies have generally admitted the effect of government regulation on the performance of corporate social responsibility,but the mechanism is still hazy,which could make vastly different conclusions.Meanwhile,we believe that the combination of internal control and government regulation is a powerful spur for companies to undertake social responsibilities,even strategic social responsibilities.Under this background,based on the stakeholder theory etc.and the data related to intenal control,government regulation and corporate social responsibility,we set A share listed companies in Shanghai SE ranging from 2012 to 2015 as the sample to investigate the performance of corporate social responsibility under different internal control,and investigate the function of government regulation in affecting their relationship.On this basis,we further examine the impact of internal control and government regulation in five specific aspects of corporate social responsibilities.The result shows that: 1.The stronger internal control is,the more performance of corporate social responsibility enterprises take.2.Whether state-owned enterprises or non-state-owned enterprises,government regulation plays a restraining role in the performance of their social responsibility.3.Government regulation generally strengthens the influence of internal control on enterprises' corporate social responsibility behavior,which,to a certain extent,supports the applicability of strategic corporate social responsibility in China's enterprises.4.Government regulation can strengthen the impact of internal control on non-state-owned enterprises' social responsibility more than that on state-owned enterprises.5.Internal control plays a promoting role in specific corporate social responsibilities,while government regulation severely inhibits all the responsibilities,especially shareholder and society responsibilities.Besides,government regulation tends to weaken the impact of internal control on shareholder and society responsibilities more than the rest.Under the unique background of China,we discuss how internal control and government regulation affecting the performance of social responsibility,and its main contribution is about: 1.From inside and outside perspective,we discuss internal control and government regulation on their effect to enterprise's undertaking social responsibilities.Previous research,based on a single perspective,can not fully reflect the real difference in the decision when enterprises face the impact of internal and external mechanism.Because the complicated interaction mechanism between external institutional environment and enterprise decision,it seems more scientific and convincing to consider government regulation into corporate social responsibility.2.It's meaningful academically and practically to investigate the regulatory role of government regulation in the process of internal control affecting corporate social responsibility performance.Is internal control of enterprises still able to promote the performance of corporate social responsibility under government regulation,even strengthened? Or inhibited? Or has government regulation lost its value under the trend that enterprises are paying more attention to the fulfillment of social responsibility,while internal control has become one of the main ways to fulfill it? Unfortunately,there is only a few about this.3.Further classification of the research object,and in-depth study of classified corporate social responsibility do help us to comprehensively analyse and understand the performance.Implications of this paper are: Firstly,from the perspective of business,combining internal and external governance into business strategy,is effective to realize enterprise strategic social responsibility.Corporate social responsibility is a competitive resource considering corporate social responsibility from long-term perspective,which can be integrated into core operation and strategy of enterprises to achieve long-term interests.Secondly,from the perspective of national governance,the role of government in corporate social responsibility appears too vital to be ignored.However,it must be clear that the government is at the helm's position rather than stroke,so an appropriate positioning of government is the fundamental task.