The effects of strategic planning and firm culture on CSR

Abstract

Scholars have paid considerable attention to studying the relationship between corporate socialresponsibility (CSR) and firm performance. However, little research demonstrates what actuallyshapes or drives effective CSR in the first place. This paper builds a case that comprehensivestrategic planning is one such driver in that it creates awareness of and formulates responses to afirm's stakeholders, thereby facilitating CSR activity. However, exploring single variablerelationships is problematic, as other important endogenous factors need to be givenconsideration in explaining CSR. More specifically, evidence suggests that firm culture canfacilitate or hinder a firm's strategic actions. One such cultural factor, humanistic culture, isargued to have a positive effect on CSR. By studying a sample of firms in Australia, resultsdemonstrate that a comprehensive strategic planning effort is positively related to CSR. Ashypothesized, a humanistic culture adds significant variance in predicting CSR, after accountingfor a firm's comprehensive strategic planning efforts.