Dr. Min is director of business programs and assistant teaching professor at Penn State University–Lehigh Valley. In addition to his DBA, Maung has an MS in chemical engineering from Manhattan College. He also has taught at the MBA level at Baruch College–CUNY and Rutgers University. Prior to academia, Maung spent 30 years in the business world, recently as sustainability director for a global pharmaceutical company. His research interests include sustainability, strategy, and supply chain.
Does Corporate Social Responsibility (CSR) really contribute to Corporate Financial Performance (CFP) in the Pharmaceutical Industry? While numerous studies have been conducted on the effects of CSR across various other industries, definitive studies have not been conducted to determine this link within the pharmaceutical industry. This research explores and analyzes this topic in greater detail.
The literature review discusses the relevance and application of Stakeholder Theory to the pharmaceutical industry. Most pharmaceutical companies have resorted to the triple bottom line approach (environmental, social, and economic) in designing and executing their CSR programs. Five hypotheses on the relationship between CSR and CFP, emanating from the literature review and the researcher‘s industry experience, have been developed and tested.
A survey tool has been developed and conducted with pharmaceutical industry practitioners and professionals to evaluate if CSR contributes to company performance. This researcher also analyzes the topic using relevant secondary Environmental, Social, and Governance (ESG) data, used in academia and industry as a proxy for company CSR performance to test the listed hypotheses. These two approaches have been used for triangulation, a useful technique for strengthening research rigor through the combining of multiple methods, measures, researchers, theories, and perspectives.
The survey found that responders agreed that CSR adds value to companies, and a key reason for this is enhanced stakeholder management. Survey results also indicate that CSR can be seen as an investment where the benefits are long term. Overall both survey results as well as secondary data indicate that CSR programs should be implemented regardless of company size, and that sheer size does not dictate whether CSR programs can be successful. Environmental initiatives, while critical for compliance, are perceived as a necessity and correlation with Corporate Performance is inconclusive. Secondary research concurs with the findings of the survey results, both from correlation and regression analyses.
This document also sheds light on the potential managerial implications of these findings that may help pharmaceutical companies manage their scarce resources more effectively. Further research opportunities are also discussed, which include a more granular analysis of various stakeholder groups.