MASTER PAPER

Research Project Proposal
for

Implication of CSR functions on Corporate Financial Performance

Supervisor:
Ms. Asma Akter Shelly
Lecturer (Banking & Finance)
School of Business
Bangladesh Open University

Submitted by:
Md. Mamunoor Rashid
MBA (Major: Finance & Banking)
Student ID # 141-33-812-028
Batch: 152
Bangladesh Open University
M-01957698521

CSR policies cover issues like as environmental policy and sustainability. Benefits to business of good CSR are brand differentiation. has not imposed or proposed requirements for disclosure of social and environmental performance. However some progressive companies disclosed some information on community. brings in new business and improves stakeholder return. The discussions on CSR practices in Bangladesh in its modern global terms. connected and external) as part of the decision making process . avoiding regulation and building reputation in and outside the country.not just the 'key players'. CSR enhances the reputation of an organization. treatment of staff. risk management and reporting. This means considering all stakeholders (internal.1. environmental management and transparency in corporate governance is not satisfactory. charitable work and contribution and supporting local communities. However. 2. is relatively new. Though CSR is a relatively new concept in Bangladeshi corporate culture. The Bangladesh Govt. With the increasing importance attached to environmental issues and social responsibility. no provisions regarding CSR exist in the Companies Act 1994. Statement of the problems Corporate Social Responsibility (CSR) is a companies' responsibility to the society in which it operates. there is intensifying pressure from stakeholders to do so. The Bangladesh Companies Act 1994 sets the general framework for corporate financial reporting. the CSR functions added for modern management responsibility to the trends identified in the local and international economic environment. Any company that does not develop and promote its CSR policy to all stakeholders will face increasing threats to its reputation. awareness of corporate social reporting has rapidly increased. because it makes sound business sense. health and safety. environmental and consumer related activities. Firstly. largely due to poor enforcement of existing laws and inadequate pressure from civil society and interest groups like Consumer Forums. the status of labor rights practices. In general. it is true that in Bangladesh. Secondly. Background/Rationale/Importance/Justification of the Study 6 . All companies need to consider their CSR for two basic reasons.

Believe me. Who does not like to work with an organization where management is kind enough to 6 . some of which are even unheard as an initiative of corporate social responsibility. - Corporate social responsibility also gives employees a feeling of unparalleled happiness. Bringing a smile to people’s life just because your organization has pledged to educate the poor children of a particular village not only gives a sense of inner satisfaction but also pride and contentment. Do not undertake CSR activities only to gain publicity but because you believe in the cause. Corporate social responsibility plays a crucial role in making your brand popular not only among your competitors but also media. - Corporate social responsibility goes a long way in creating a positive word of mouth for the organization on the whole: Doing something for your society. providing employment to people and so on. The importance’s of corporate social responsibility are as follows: - The term corporate social responsibility gives a chance to all the employees of an organization to contribute towards the society. country and so on: We all live for ourselves but trust me living for others and doing something for them is a different feeling altogether. planting more trees for a greener environment. environment. People develop a habit of working together as a single unit to help others. stake holders. You really do not have to invest much in corporate social responsibility activities. One should never forget the importance of society and environment in our lives. and customer’s or for that matter stake holder. Corporate social responsibility gives an opportunity to organizations to work towards the betterment of the society and make it a better place to live. other organizations and most importantly people who are your direct customers. customers’ would not only take your business to a higher level but also ensure long term growth and success. They also develop a sense of loyalty and attachment towards their organization which is at least thinking for the society. bringing electricity to a village.Corporate social responsibility allows organizations to do their bit for the society. environment. In fact they start enjoying work together and also become good friends in due course of time. It is indeed high time when we also start thinking about people around us who are less privileged and fortunate than us. employees take pride in educating poor people or children who cannot afford to go to regular schools and receive formal education: CSR activities strengthen the bond among employees. People develop a positive feeling for a brand which takes the initiative of educating poor children. There are many organizations which tap remote villages.

when is the last time you did something for your society.take out time for the society and contribute in their own small way? Ask yourselves. 6 . Trust me. Positive word of mouth eventually helps to generate more revenues for the organization. stake holders or environment? Corporate social responsibility also goes a long way in building a positive image of the brand. People start believing in the brand and nothing can help you more than your customers trusting you and your brand. your brand becomes a “common man’s brand”. customers.

Therefore corporate communication may take an important position in contributing to the CSR field. As the Multinational companies are the pioneers in bringing and practicing CSR in Bangladesh. Net Profit Margin. All of these companies are listed in Dhaka Stock Exchange. We can consider several functions of corporate communication as very important in the nearest future which would assist the development of CSR. This research is a Formal Study because it tries to answer few research questions and hypotheses that have been proposed. These MNCs are British American Tobacco. GSK. As no survey/interview has been conducted for this research and as this research has been done based on historical data so few descriptors of research design have been eliminated. As this research carries out once and represents a snapshot at a specific point in time. Scope of the Study Corporate communication would play an important role in the development of CS. In corporate communication and communications in general there is no strong differentiation of products and specialization. 4. Although the corporate communication and corporate social responsibility as two separate fields. Marico. This is a causal study because it tries to find out relationships among dependent and independent variables. This is due to the small market size of a country. This research aims to explore relationship between CSR and FP by measuring FP through Net Profit. this can be considered as crosssectional study. these fields will largely overlap and contribute to each other. Quality Maintenance and Cooperation. This research is an Ex-Post facto research as the researcher of this research only reports what’s happening or what has happened and the researcher has no control over variables. Total Assets. in this research five MNCs financial information has been used to measure FP of those MNCs’ that has been impacted by their CSR activities. Objectives of the Study This research depicts that the impact of CSR on corporate Financial Performance. RB and Berger. Many researchers have shown the positive relationship between CSR and Financial Performance (FP). The scopes of CSR are: Communication. But there is few researches have been conducted in Bangladesh on this topic. Education.3. 5. 6 . Methodology of the Study The design of this research has been described by the eight descriptors of research design. ROE and ROA.

Results are generated in MS Excel. If the sample size included both MNCs’ and local companies’ financial data then the result would have been more acceptable and considerable. net profit margin to sales and the amount of total assets. 7. The research is conducted fully based on historical data and only data of five MNCs’ of five years. The data was collected from annual reports of these companies. Bigger the size of the sample better the result is. The data which is used in this research are financial data. This research is cross-sectional study includes historical data. 6 . total assets. The result would be more accurate if much data was used. The correlation and regression methods were used to find the association between Financial Performance and CSR activities. Based on historical data the hypotheses have been tested through Excel. The five MNCs are 1. Variables used in the study are CSR amount. Plan (Chapter/Structure) of the Study In this research the sample of five years financial data from 2010 to 2014 of 5 foreign listed corporations in Dhaka stock exchange has been taken. equity and amount of CSR that have been extracted from annual reports of the firms. Berger Bangladesh These MNCs have been selected randomly among all MNCs that have been operating in Bangladesh. ROE and ROA. profit after taxation. GSK Bangladesh 4.6. RB Bangladesh 5. Limitations of the Study There are some limitations of this research. British American Tobacco Bangladesh 2. The research sample includes only five DSE listed MNCs financial data for five years. revenue. profit after tax. Marico Bangladesh 3.

1(1): 12-18 Published online September 28. The Social Sciences 10(2): 171-177 2015 ISSN: 1818-5800 @ Medwell Journals 2015 6.com/j/ijfbr) doi: 10. World Bank 9. Report No. VOLUME-44. 37379-GLB-Beyond CSR: The Scope of Corporate Investment in CDD. Issue (4).com/journal/sustainability) 11.mdpi. References/Bibliography 1. Csaba Lentner − Krisztina Szegedi − Tibor Tatay 7. The relationship between CSR and financial performance-A quantitative study examining Swedish publicly traded companies (Linnaeus University Sweden) 12. Ikramul Hasan1(http://www. *. Volume XIII. Corporate Social Responsibility and Profitability: A Case Study on Dutch Bangla Bank Ltd.hgpub.12 3. JULY-AUGUST 2016 2. 5. Corporate Social Responsibility and Financial Performance Linkage‐Evidence from the Banking Sector of Bangladesh Sarwar Uddin Ahmed1. NUMBER-4.8. Md.ijfbr. International Journal of Finance and Banking Research 2015. Journal: THE COST AND MANAGEMENT ISSN 1817-5090.11648/j. 2015 (http://www.html) 10. CBS online Journals 8.com/jorm.sciencepublishinggroup. Zahidul Islam2. Finance Act’ 2015 & 2016 6 . 2010 4. Sustainability ISSN 2071-1050 (www. European Research Studies. ITO 1984 13.20150101.