Corporate social and financial performance: An investigation in the UK supermarket industry

The comparison of corporate social performance with corporate financial per formance has been a popular field of study over the past 25 years. The resu lts, while broadly conclusive of a positive relationship, are not entirely consistent. In addition, most of the previous studies have concentrated on large-scale cross-industry studies and often with a single variable for cor porate social performance, in order to produce statistically significant re sults. This weakens the richness of understanding that might be obtained fr om a single industry study with multiple social variables, which would also allow investigation of inter-relationships between individual and sub-sets of social performance measures and between individual and sub-sets of soci al performance and financial performance measures. There have also been cri ticisms that the results lack a rigorous theoretical basis, and the paper d emonstrates clearly how stakeholder theory must form the basis for this are a of research. Following a review of the literature this paper presents the initial findings from a study of the U.K. Supermarket industry which sugge st that contemporaneous social and financial performance are negatively rel ated, while prior- period financial performance is positively related with subsequent social performance. Positive relationships between both age and size of the company with social performance are also found.