An Assessment of the Mediation Role of Strategic Orientation On Corporate Social Responsibility Strategy and Business Value Nexus: Evidence from Multinational Companies in Ghana

ABSTRACT

The issue of corporate social responsibility (CSR) strategy is gaining significant attentions among scholars in this millennium. It is seen as a new approach for companies, particularly, multinational companies (MNCs) operating in developing countries to independently take actions that lead to better levels of societal development while simultaneously creating business values. This study therefore examined the nexus between CSR strategy and business values of MNCs in Ghana. The study also assessed whether MNCs’ strategic orientation will mediate the relationship between CSR strategy and business values in Ghana. The study adopted quantitative research methodology. Employees of selected MNCs in Ghana were sampled. A total of 267 valid and usable questionnaires were used for the analysis. Structural equation modelling (SEM) was used to analyse the data to address the hypothesized relationships. The study shows that CSR implementation positively predicts business values (economic value, human capital value and reputational value). Additionally, the results indicate that CSR strategy significantly creates business values. However, CSR implementation proved to be better predictor of business values than CSR strategy, thus, emphasizing the age old adage that the sweetness of the pudding is in the eating. Furthermore, the strategic orientation of MNCs was found to also contribute indirectly to the effect of CSR implementation and CSR strategy on business values. This study therefore, concludes that CSR must not be regarded as a cost centre, but an investment instrument that can accrue various dividends such as improved financial status, better human capital outcomes, attractive and appealing corporate reputations. CSR strategies should be strategically integrated or aligned with the firm’s strategic orientation. In this way, CSR strategy will continue to play its rightful roles in creating a healthy business and a just society, as well as maximizing nature’s resources while minimising harms to the natural environment.