The Relationship Between Corporate Social Responsibility and Corporate Reputation in Serbia

Corporate social responsibility (CSR) is a concept that is based on the idea of a balance between economic, social, and environmental goals of companies. In contemporary business, companies need to be responsible not just to their shareholders, but to broader stakeholders, where employees, customers, investors, suppliers, local community, and natural environment are mostly affected. Also, CSR is seen as a concept that can enhance different financial and market performances, where corporate reputation is gaining more and more attention. Corporate reputation is seen as one of the most important companies’ assets, and it has a great influence on business success. Based on the stakeholder theory and resource-based theory, the authors of this paper investigated both concepts to increase the body of knowledge and provide some practical implications for companies. The paper aims to investigate the relationship between CSR and corporate reputation. The problem of the research is defining of a relationship between CSR and corporate reputation in companies in Serbia, and between specific dimensions of CSR and corporate reputation. The methodology used in the research obtained the analysis of available literature and the empirical analysis of the data on CSR and reputation. The sample was created from 73 large private processing companies in the Republic of Serbia. The authors used PLS-SEM method to investigate the proposed relations, i.e., that CSR has a positive relation with corporate reputation. This methodology was for the first time conducted in the business environment in Serbia, which will enhance the possibility of comparison with the results from other countries. The results pointed that CSR, as a higher-order construct, has a positive relation with corporate reputation, like all dimensions of CSR (responsibility to employees, customers, local community, environment, suppliers). At the end, the authors proposed theoretical and practical implications and limitations of the research.