The Impact of Corporate Social Responsibility on Financial Performance in a Selected Medium-Sized Clothing Manufacturing Organization in South Africa

Abstract

Corporate Social responsibilities (CSR) is an established idea that urges corporations to incorporate environmental and social responsibilities into their operations. It enables businesses to be socially responsible to stakeholders and the public. Small and medium-sized enterprises (SMEs) have received international recognition for their contributions to social and economic development. This study investigates the impact of CSR on financial performance at a medium-sized clothing manufacturing company in the eThekwini District Municipality of KwaZulu Natal, South Africa. The study was designed to be conclusive. It employs a quantitative approach, examining the experiences of an organization that has implemented CSR. The study's objective was met by gathering pre- and post-quarterly data on profitability and production costs. The data was analysed using the Ordinary Least Squares (OLS) model and the Statistical Package for the Social Sciences (SPSS). The findings show that CSR can boost financial performance by minimising business-related risks and compliance expenses, which leads to increased profitability and lower production costs. Any rise in profitability boosts the organization's financial performance, while any drop in production costs improves the company's financial performance. This study identifies the strengths and weaknesses of CSR in relation to financial performance in the selected medium-sized manufacturing business in South Africa.

Keywords

• corporate social responsibility
• financial performance
• production costs
• manufacturing SME
• South Africa