IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON ORGANIZATIONAL IMAGE AND PERFORMANCE IN THE BANKING SECTOR
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IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON ORGANIZATIONAL IMAGE AND PERFORMANCE IN THE BANKING SECTOR
Project overview
An organisation having a moral commitment to its customers and employees has a better positive reputation in the community. Corporate social responsibility has the potential to enhance the attractiveness of a company’s image while also boosting the performance and efficacy of its activities (Arendt & Brettel, 2010).
Corporate social responsibility (CSR) has gained prominence in the business world. Federick et al. (1992) said that organisations must accept responsibility for their environmental actions.
Corporations feel that implementing a CSR strategy will help them develop a positive reputation, allowing them to stand out in their market (Kotler and Lee, 2005; Fombrun and Shanley, 1990).
More businesses are realising that CSR policies can be critical to their performance (Lichtenstein, Drumwright, & Braig, 2004). However, there has been very little research on how CSR strategies affect financial performance.
This was owing to the old understanding of CSR, which held that no aspect of CSR could contribute value, and therefore for a long time, CSR strategies were not viewed as a means of increasing profits (Edmans, 2014).
This viewpoint has recently shifted, and CSR tactics are now viewed as a means of increasing profitability, which has increased corporate interest in CSR policies and the amount of research on the benefits of CSR on performance (Giannarakis and Theotokas, 2011).
Corporate social responsibility applies to practically every organisation, but banks are particularly interested in these programmers because they must go above and above to satisfy their diverse stakeholders.
According to Nwankwo (1991), the benefits of CSR include maximising profit for shareholders, who are the true owners of the business, maintaining optimal liquidity for depositors
complying with regulator demands, meeting deficit sector credit demand, contributing to economic development, and meeting the needs of the immediate community in which they operate.
However, the instability caused by the last financial crisis prompted a reappraisal of the impact of bank management on countries’ long-term development. Furthermore, several financial institutions (92 from 37 countries as of April 2018) have chosen to use the Equator Principles, which were formally established in 2003 to determine, assess, and manage environmental and social risk in project finance.
According to Scholtens (2009), socially responsible banking is becoming a well-established notion that ties a bank’s licence to operate to its ability to remunerate investors while also meeting community expectations.
CSR is also done since today’s customers and governments expect organisations to behave more ethically. According to Kashyap et al. (2006), corporations are voluntarily incorporating CSR into their business strategies, mission statements, and values in multiple domains, while respecting labour and environmental laws and balancing the competing interests of various stakeholders.
Another argument for CSR initiatives by today’s major firms is to obtain a competitive advantage over their peers. In this regard, CSR efforts assist firms attract and keep not only customers but also engaged personnel, ensuring the corporation’s long-term sustainability.
Drumright (1996) believed that organisations who implemented effective CSR policies generated a positive social identity and experienced greater customer and staff loyalty. CSR efforts are frequently correlated with improved financial success of organisations.
Margolis et al. (2001) discovered a significant positive relationship between CSR and corporate financial performance. According to Gildea (1994) and Zaman et al. (1996), companies that care about the environment and practise good CSR experience increased consumer purchase preference as well as increased investment appeal.
In developing this project, the researcher used a descriptive research survey design. This study design was chosen for its ability to discover traits of a large population from a group of individuals.
The design was appropriate for the study since it attempted to assess the influence of corporate social responsibility on organisational image and performance in the banking sector in Istanbul.
The researcher will administer these study questions through oral and direct interviews. Responses from respondents were required, as opposed to surveys, which are less rewarding due to delayed delivery and loss of responses from respondents.
The researcher will utilise the simple percentage method to analyse data. Furthermore, the study will take into account the percentages and degrees of replies.
The ratio of those who did not respond affirmatively will be determined, and inferences will be drawn based on that. The levels of replies will be represented in tabular form.
Banks cannot do this alone; they must involve the community, who are their clients. To produce relevant services and products, they must conduct a study to gather information from their customers about their perceptions of their business operations
particularly the quality of services rendered, in order to increase customer satisfaction and, ultimately, loyalty by offering a variety of products that meet their expectations.
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