Corporate social responsibility and its link to financial performance. Application to Johnson & Johnson, a pharmaceutical company
| Pages | 4-18 |
| DOI | https://doi.org/10.1108/20425941311313065 |
| Published date | 01 January 2013 |
| Date | 01 January 2013 |
| Author | Jessica Turcsanyi,Seleshi Sisaye |
| Subject Matter | Public policy & environmental management |
Corporate social responsibility
and its link to financial
performance
Application to Johnson & Johnson,
a pharmaceutical company
Jessica Turcsanyi
Federated Investors, Inc., Pittsburgh, Pennsylvania, USA, and
Seleshi Sisaye
Palumbo-Donahue School of Business, Duquesne University, Pittsburgh,
Pennsylvania, USA
Abstract
Purpose – This paper applies the social contract and legalistic ethical frameworks, to study whether
or not corporate socia l responsibility (CSR) and sustainability support corporate financial
performance. The purpose of this paper is to provide empirical data from Johnson & Johnson, a
pharmaceutical firm, to document whether or not CSR has contributed to creating financial wealth and
value for the corporation.
Design/methodology/approach – The paper approaches CSR as embedded in social contract and
legalistic ethical frameworks, which suggest that business organizations are self-motivated to report
on CSR. The underlying premise of the research is that socially desirable sustainable activities are
expected to improve financial performance.
Findings – A case study of a multinational corporation (MNC) and CSR member company, Johnson &
Johnson, substantiates that CSR and sustainability have contributed to improve the organization’s
economic performance. The empirical evidence from Johnson & Johnson suggest that profitability
can be sustained for a long period of time if economic performance is effectively integrated with
social and environmental goals, as part of the business strategic planning process, to benefit
shareholders, consumers, society and the community at large. When CSR is incorporated in business
strategies of sustainability,including social and environmental performance, it complements economic
profitability objectives.
Originality/value – The contribution of this paper is in the extension and application of the
importance of sustainability and CSR in the pharmaceutical industry. It is one of the few studies that
examined the impact CSR and sustainability have on the financial and economic performance of the
health care industry.The study has documented that sustainability promotes transparency, adherence,
and disclosure that incorporates and promotes social equity, environmental restoration/renewal
and financial performance. It is argued that in the long run, organizations that have integrated
sustainability and CSR in their strategic planning processes are able to manage risks and take
advantage of opportunities of programs that are safer, greener, and economical.
Keywords Business performance, Pharmaceuticals industry, Corporate governance,
Corporate social reporting, Sustainability reporting, Social issues, Health care gover nance,
Environmental and economic performance, Sustainability at Johnson & Johnson
Paper type Research pap er
Introduction
In the last few decades, the issuance of sustainability reports has become main stay
in business practices. The Brundtland Commission created the overall concept
of sustainable development in 1987 (The World Commission on Environment and
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/2042-5945.htm
WorldJour nal of Science, Technology
and Sustainable Development
Vol. 10 No. 1, 2013
pp. 4-18
rEmeraldGroup Publishing Limited
2042-5945
DOI 10.1108/20425941311313065
4
WJSTSD
10,1
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