IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON THE FIRM'S SHARE PRICE & PROFITABILITY A CASE OF UNILEVER PAKISTAN LTD

Abstract

Purpose - The main purpose of conducting this study was to determine as to whether or not the CSR activities conducted by Unilever Pakistan Ltd. have an impact on their share price & profitability. Today local firms in Pakistan are hesitant to engage in CSR activities because they consider these to be an added cost without the revenue. Looking into the CSR activities & whether or not these activities lead to financial gains is what led the researcher to look into this topic. The focus of this research is aimed at Unilever Pakistan Ltd. since it is actively engaged in CSR initiatives & it has a sustainable living plan along with the Unilever foundation. Methodology - The methodology used for the purpose of this study included the use of a questionnaire filled out by a sample of target respondents & the analysis of the financial data for Unilever Pakistan Ltd. from 2007-2013. The respondents of this study included individuals who belonged to different age group, income group, gender & place of residence. To analyze the data correlation test is conducted in order to determine the impact of CSR on the Unilever’s share price & profitability. Findings - Proper analysis of this research study concludes that CSR does indeed seem to have a positive relationship with the Unilever’s share price & profitability. CSR does indeed lead to positive financial performance when Unilever Pakistan invest in such activities & they are able to reap the benefits as customers value such activities & reward them accordingly leading to an increase in the profitability of the firm. Practical Implications - This research would benefit Unilever Pakistan Ltd. itself as it would help ease their decision making with regards to CSR. Other firms including MNC’s would also be able to evaluate the impact of their CSR activities on their profitability. Shareholders & investors would also come to know & realize the importance of CSR activities & the important role it plays in a firm’s success. Other researchers working on the topic of CSR would also benefit from this research.