Corporate Social Responsibility and its Role in Financial

Performance

Research Project Submitted in Partial Fulfilment of the Requirements for the

Degree of

BCOM Honours

by

Akansha Tiwari

To the

DEPARTMENT OF COMMERCE

BHOPAL SCHOOL OF SOCIAL SCIENCES

April, 2021

Submitted by Guided by
Akansha Tiwari Dr. Smitha Pillai

Associate Professor

Department of Commerce
 CERTIFICATE

It is certified that the work contained in the project report titled Corporate Social
Responsibility and its role in Financial Performance by Akansha Tiwari, has been carried
out under my supervision and that this work has not been submitted elsewhere for a degree.

Signature of Supervisor: ……………

Name: Dr. Smitha Pillai, Associate Professor

Department: Commerce

Bhopal School of Social Sciences

April, 2021

II
 DECLARATION

I hereby declare that this project report entitled Corporate Social Responsibility and its
role in Financial Performance was carried out by me for the degree of BCOM Honours
under the guidance and supervision of Dr. Smitha Pillai, Associate Professor of Department
of Commerce, BSSS College. The interpretations put forth are based on my reading and
understanding of the original texts and they are not published anywhere in any form. The
other books, articles and websites, which I have made use of are acknowledged at the
respective place in the text. This research report is not submitted for any other degree or
diploma in any other University.

Place: Bhopal

Name of the Student: Akansha Tiwari

Class & Section: BCOM Honours-A

Date: 24-04-2021

III
 ACKNOWLEDGEMENT

I would like to thank our Principal Dr. Fr. John P.J. and Vice Principal Dr. Sr. Sonia Kurien
for their immense support and blessings. I thank our HOD Dr. Amit Kumar Nag for his
support. I would like to express my special thanks of gratitude to my research guide Dr.
Smitha Pillai, Associate Professor of Department of Commerce for her valuable suggestions
and guidance and for giving me the golden opportunity to do this wonderful research project
on the topic: Corporate Social Responsibility and its role in Financial Performance.
Without her help it would have been difficult for me to have reached this state of completion
of my project report. Also, I would like to thank my parents and friends who helped,
supported and encouraged me during this research project.

I wish to acknowledge the help of all those who have provided me information, guidance and
other help during my research period. This research project acts as a bridge between
theoretical and practical understanding.

IV
 Table of content

Content Page no.

Chapter1: Introduction of the topic 1-5
1.1 Rationale of the study 2
1.2 Introduction to the Automotive Industry 3
1.3 Introduction to the Tata Motors 4
1.4 Justification of the topic 5
Chapter2: Review of literature 6-19
2.1 International Review 7-13
2.2 National Review 14-19
Chapter3: Research Methodology 20-24
3.1 Objectives of the study 21
3.2 Research Hypotheses 22
3.3 Scope of the Study 23
3.4 Limitation of the study 24
Chapter4 : Data representation and Analysis 25-32
4.1 Data representation and interpretation 26-29
4.2 Hypotheses Testing 30-32
Chapter5: Results and Discussion 33-38
5.1 Major Findings 34-35
5.2 Discussions and Suggestions 36-37
5.3 conclusion 38
References 39-40

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Chapter1: Introduction of the topic

1.1 Rationale of the study

1.2 Introduction to the Automotive Industry

1.3 Introduction to the Tata Motors

1.4 Justification of the topic

1
Chapter 1: Introduction of the topic

1.1. Rationale of the study

The main objective of the existence of any business organisation is to earn profit. Along
with this objective the business has to serve the society also and here the term Corporate
Social Responsibility (CSR) has its origin. Although the obligation of Corporate Social
Responsibility was not mandatory but on 1st April, 2014 India become the first country
which made Corporate Social Responsibility legally mandatory for the company and
accordingly the business organisations should expend certain percentage of their turnover
and profitability towards the welfare of the society by passing the rule under section 135
of India’s companies act. And precisely it becomes important to identify impact of
Corporate Social Responsibility on the performance of business. In this day and age of
cutthroat competition it becomes essential to determine the worth of each and every
spending by the organisation and how these spending influence financial performance (in
term of net profit, net revenue and total assets) of the organisation. The study endeavour
to know, is there any relationship between Corporate Social Responsibility and
performance of the organisation or not and if yes, to what extend it is. The researcher has
included financial data of Tata Motors from the year 2017-18 to 2019-20 and found that
there is an existence of relationship between CSR and financial performance of the
company. (Tigari, 2017)

2
1.2. Introduction of Automotive Industry
Automotive industry includes all those companies and organisations involved in the
business of manufacturing of automobiles. The industry of Automotive engages in the
activities of designing, developing, manufacturing, marketing and selling of motor
vehicles such as passenger cars, trucks, farm equipments and other commercial vehicles.
The development of auto mobile industry leads the development of other industries also
such as construction industry which involved road and building constructions businesses.
Automotive industry encourages more mobility of people which leads the progress of
ancillary industries such as fuel and travelling and tourism industries. The automotive
industry use industrial products such as steel as its raw material and become the largest
buyer of these products. In order to deal with the problems related to pollution, traffic
congestion and auto safety, the automotive industry maximising its efforts in the direction
of innovation. In this day and age, manufacturers of this industry forces in the
improvement of its fuel efficiency and try to provide safety to its customers. Companies
in this industry experimenting with the cars powered with natural fuel, electricity,
hydrogen fuel cells and solar power. (Infoplease)

3
1.3. Introduction of Tata Motors

Tata Motors Limited is an Indian multinational automobile manufacturer based in

Mumbai, Maharashtra. It is a part of Tata Group, an Indian conglomerate. Tata Motors is
a public company formerly known as Tata Engineering and Locomotive Company Ltd.
(TELCO) founded by Jehangir Ratanji Dadabhoy Tata in 1945. Tata Motors is a world-
renowned automobile manufacturer. Its vast collection comprises a wide variety of
automobiles, SUVs, trucks, vans, and military equipment. Tata Motors is one of India's
leading automakers, with a diverse portfolio of integrated, smart and e-mobility solutions.
They believe in 'Connecting Aspirations' and providing creative mobile options that meet
the needs of their customers. Tata Motors is India's largest automobile manufacturer and
they are continuing to shape the Indian commercial vehicle landscape by introducing
cutting-edge power trains and electric systems that are packaged for power and consumer
convenience at the lowest life-cycle prices. Impact Design underpins their latest
passenger cars and utility vehicles, which provide a superior combination of durability,
driveability and connectivity. Their emphasis is on linking aspirations, and their pipeline
of tech-enabled goods keeps them ahead of the competition. Modular architecture,
manufacturing complexity reduction, connected and autonomous vehicles, clean
drivelines, shared mobility and low overall cost of ownership are the six main mobility
drivers they defined. TAMO, their sub-brand is an innovation incubation centre that can
generate innovative mobility solutions through new platforms, business models, and
alliances. (Tata Motors)

4
1.4. Justification of the topic

CSR refers to the responsibility taken by the company itself to serve society. By CSR
activities Company helps in the improvement of the society and fulfil its duty towards the
communities and the environment. According to a study published in Forbes magazine by
the Reputation Institute (a private global consulting firm based in New York), 42 percent
of how people feel about an organisation is dependent on their understanding of its CSR
operations. This indicates that image of the company majorly depend upon the perception
of the people on company's CSR activities. (Ellis-Hall, 2020) Therefore it is important to
know the relationship exist among the image of the company created by its activities of
CSR and the financial performance of the company. This study tries to examine the
linkage between the cost of CSR and financial performance of the organisation. The study
is also importance from the point of view that it investigate the impact of CSR on
financial performance of the company and evaluate that does CSR has a positive impact
on financial performance of the business or not in the context of earning. In order to know
about the relationship, the researcher includes Tata Motors which is one of the leading
automotive manufacturing companies of India in this study. The company involved in
CSR activities since its existence. The researcher includes Tata Motors in this study as it
is one of the largest automotive companies. Tata Motors involve in the activities of CSR
since its existence.

5
Chapter2: Review of literature

2.1 International Review

2.2 National Review

6
Chapter 2: Review of Literature

2.1. International Reviews

Lin Chin-Shien, Chang Ruei-Yuan, Dang Van Thac, 2015, “An Integrated Model to
Explain How Corporate Social Responsibility Affects Corporate Financial Performance”,
proposed in their research study an integrated model to explain the influence of CSR on
financial performance with intellectual capital as a mediator and industry type as a
moderator. They look intellectual capital as one of the most important intangible resources
that create value for the company. They include human capital, structural capital and
customer capital as the elements of intellectual capital. They further described human
capital as employee competences, knowledge, skills and all aspects of human resources.
Structure capital delineate as elements such as software systems, supply chains and
corporate flows. Customer capital defined as customers, customer loyalty, customer
relationship, distribution channels, good contracts and licenses. According to their study
CSR disclosure varies industries-to-industries and the reason behind this is the variations
in the costs and benefits associated with the characteristics of the different industries.
Accordingly, the industries that are directly concern with environment are more disclose
their environmental performance as compared to other industries. In order to understand
the relationship between CSR and firm financial performance, they proposed an integrated
model. There paper argued that CSR is significantly associated with firms financial
performance, CSR can also enhance firm intellectual capital which in return increases firm
financial performance and in this way intellectual capital is mediating the relationship
between firm financial performance and CSR. To explain this, they collected their data
from Kinder Lyndenberg Dommini (KLD) and Compustat databases from the year 1998 to
2008. They used regression analysis. The empirical result of their study indicates that
intellectual capital mediates the relationship between CSR and financial performance and
industry type moderates the direct influence of CSR on financial performance. The
conclusion of their research is that CSR can enhance intellectual capital which can
increase financial performance. However, the direct impact of CSR varies with the type of
industry. (Lin Chin-Shien, Chang Ruei-Yuan, Dang Van Thac, 2015)

7
Uadiale Olayinka Marte, Fagbemi Temitope Olamide, 2012, “Corporate Social
Responsibility and Financial Performance in Developing Economies: The Nigerian
Experience”, examined in their study the impact of CSR activities on financial
performance considering Return on Equity (ROE) and Return on Assets (ROA), focusing
developing economies with special reference to Nigeria. In their study, they consolidated
definitions of CSR given by various authors and researchers and considered CSR as
concerning with three major dimensions- economic, environmental and social, which is
usually called the triple bottom line and this triple bottom line considered that companies
should not only have the objective of profitability but also have the objective to add social
and environmental values to the society. The objective of their study was to examine the
extent to which Corporate Social Responsibility (CSR) contributes to financial
performance of Nigerian listed firms. For that they considered all the companies listed on
the Nigerian Stock Exchange as the population of their study. From that population a
sample of forty listed companies on the Nigerian Stock Exchange was randomly selected,
excludes banks and Insurance Companies. They gave the justification of excluding banks
and other financial institutions as these institutions are not directly affect negatively on
their environment and also due to their specific core business and risk profile, they would
have altered the average results. They considered financial performance as dependent
variable which was represented by Return on Equity (ROE) measured as a proportion of
Profit after tax to issued share capital and Return in Assets (ROA) measured as the
proportion of Profit after tax to total assets and take community performance, environment
management system and employee relations as independent variables or parameters. They
used Pearson correlation analysis in order to determine the degree of relationship among
them. The results of their study show that CSR has a positive and significant relationship
with the financial performance measures. On the basis of these findings, their study
recommended that in order to boost corporate image and reputation along with increasing
their returns, entities in Nigeria should invest in CSR activities. (Uadiale Olayinka Marte,
Fagbemi Temitope Olamide, 2012)

Trang Ho Ngoc Thao, Yekini Liafisu Sina, “Investigating the link between CSR and
Financial performance – Evidence from Vietnamese listed companies”, 2014, the study
investigates CSR practices done by the companies of Vietnam, along with it the effect of
CSR on Corporate Financial Performance (CFP). For the research they took 20

8
Vietnamese listed companies from Ho Chi Minh and Ha Noi Stock Exchanges as their
sample. To obtain CSR and financial performance data, content analysis was used and
information from the annual reports of these companies from the year 2010 to 2012 was
collected by them. The study contributes to knowledge by identifying CSR practices in
Vietnam and the effects on the companies. They used Return on Asset (ROA), Return on
Equity (ROE) and Return on sales (ROS) as the proxies of financial performance of the
companies. Total revenue and total asset were used as company size and the ratio of total
debt to total assets as their measurement of risk. They used descriptive statistics in the
form of mean, standard deviation and the minimum and maximum points in respect of
their variables [revenue, total of assets, Return on Assets (ROA), Return on Equity (ROE),
Retune on Sales (ROS), debt to total assets (DTA) and CSR], correlation and regression
analysis. By their study they find that the companies in Vietnam are having a modest
relationship between Corporate Social Responsibility (CSR) and Corporate Financial
Performance (CFP). And also found that among the level of debt and CSR, there exist a
relationship. Therefore their study recommended that CSR practices benefits the
companies and also contributes to their sustainable development. They also found that no
relationship exist between CSR and firm size and believed that the reason behind this was
the newly develop interest of large companies in Vietnam at that time. (Trang Ho Ngoc
Thao, Yekini Liafisu Sina, 2014)

Sayekti Yosefa, “Strategic Corporate Social Responsibility (CSR), Company Financial

Performance, and Earning Response Coefficient: Empirical Evidence On Indonesian
Listed Companies”, 2015, in this study, the researcher observed and evaluated the impact
of strategic and non-strategic CSR on the financial performance of the companies along
with the effect of strategic and non-strategic CSR on Earning Response Coefficient (ERC).
The study considered CSR as the path by which companies can enhance their financial
performance along with serve their responsibilities and duties towards the society in which
they exist. The study included some of the empirical models to test the set hypotheses. The
researcher took 136 out of 397 companies which were listed by the Indonesia Stock
Exchange from the year 2005 to 2008. From the empirical evidences the study found that
financial performance of the company is affected by the level of strategic CSR positively
and negatively affected the financial performance by the level of non-strategic CSR. This
study also examined that the companies and their shareholders are differentiate strategic

9
and non-strategic CSR. This study indicates information of strategic CSR has a positive
impact on Earning Response Coefficient (ERC) and it does not affected by the information
of non-strategic CSR. Accordingly, the investors take strategic CSR information as a good
sign of a healthy management which is able to enhance the financial performance of the
company and simultaneously manages the interest of the society and environment in
which it exists. (Yosefa, 2015)

Bastic Majda, Mulej Matjaz, Zore Mira, “CSR and financial Performance-Linked by
Innovative Activities”, 2020, explored relationships among different dimensions of
Corporation Social Responsibility (CSR) and with this, they also investigated the
mediating role of innovation between CSR dimensions and financial performance. In order
to study relationships between different dimensions of Corporation Social Responsibility
(CSR), they considered CSR related to local community, CSR related employees, CSR
related to customers and CSR related the national environment which has been measured
by the scales developed by them. They used questionnaires for the collection of data from
321 managers or owners Slovene companies. With the help of Structural Equation
Modelling (SEM), they tested a conceptual model. Firstly, they analysed CSR to
employees along with CSR to customers, CSR to local community and CSR to natural
environment, then analysis their relation with innovation performance and in the end with
financial performance. It was found by the results of field-research that CSR is the most
pertinent dimension of for employees and positively influence natural environment,
customers and local community. Their research confirmed that innovation plays a role of a
mediator among CSR and financial performance. The results of their study also indicated
that CSR related to natural environment and customers has a positive impact on innovation
but CSR related with the local community had a negative impact. In the theory of social
responsibility (related with the relationships among CSR dimensions and its impact on
innovation), this study gave its contribution. (Bastic Majda, Mulej Matjaz, Zore Mira,
2020)

Wu Liu, Shao Zhen, Yang Changhui, Ding Tao, Zhang Wan, “The impact of CSR and
financial performance-Evidence from Chinese Listed Companies of the Manufacturing
Industry”, 2020, in their study they explored the connection among Corporation Social

10
Responsibility (CSR), Corporate Financial Performance (CFP) and financial distress. They
considered financial distress as poor and weak financial structure and inviting financial
risks to the firm. In order to conduct their study, they collected data of manufacturing
firms published in the China Stock Market and Accounting Research Database (CSMAR)
which is Chain’s largest financial database and Ranking CSR ratings (RKS) database
which is China’s most authoritative social responsibility rating agencies. They used
regression models. They applied signalling and stakeholder theory they came to the fact
that when the firm discharged its responsibility towards society, it give the stakeholders
(including shareholders, creditors, employees and also the government) a positive signal
which will benefits the firms in various ways such as it help the firm to get loan easily
with low cost, etc. They observed the results and findings of their research and concluded
that the relationship between CSR and CFP is more important for those firms which have
less bankruptcy risk and the relation of CSR and CFP is little stronger in State Owned
Enterprises (SOEs) as they studied and come to the conclusion that there are changes in
the relationship between CSR and CFP if the ownership differ. (Wu Liu, Shao Zhen, Yang
Changhui, Ding Tao, Zhang Wan, 2020)

B.S. Habaragoda, “Corporate Social Responsibility (CSR) and Firms Financial

Performance: Impact of Internal and External CSR in Financial Performance”, 2018, tried
to throw light on the arguable topic of linkage among CSR and Corporate Financial
Performance (CFP). The researcher considered theorizing and empirically testing to
explain the collective and individual impact of internal and external CSR on the
performance of the firm. The researcher took stakeholder group as the base of
differentiation between the activities of internal and external CSR. Activities related to
employees were taken as internal CSR and activities related with local community were
taken as external CSR. To study the link between CSR and Corporate Financial
Performance (CFP), the study used 112 listed companies in Colombo Stock Exchange
(CSE), Sri Lanka as the sample from the year 2011 to 2015. To precede the study
regression analysis was used. The study included Return on Assets (ROA) as the proxy of
financial performance of the firm. The result of that study concluded that individually
internal and external CSR influence the performance of the positively while collectively,
the significant positive effect of external CSR on the firm performance decreases and the
impact of internal CSR has remain the same. This study also concluded that there is a great

11
variation in the degree of impact between the internal and external CSR dimension.
(Habaragoda, 2018)

Oh Seungwoo, Hong Ahreum, Hwang Junseok, “An Analysis of CSR on Firm Financial
Performance in Stakeholder Perspectives”, 2017, analysed the traditional as well as
strategic relation of CSR with financial performance. The study also explored the impact
of factors of management (include R&D, technology and commercialisation) and CSR
motivation in strategic CSR and traditional CSR. The study includes both internal and
external factors of motivation. Revenue, profit and growth rate considered as proxy for
financial performance. For the collection of data, they spread the questionnaire to the
individuals who know well about their company CSR and responses of 212 participates
were collected. The study considered Structural Equation Modelling (SEM). To examine
the effect of factors of management and motivation of CSR in strategic CSR and
traditional CSR empirical analyses were used. The results of their study conclude that
financial performance factors and organisational learning for R&D capacity have a
negative effect of traditional CSR, whereas on technologic strategy plan of the technology
commercialisation capacity has a positive effect. Traditional CSR is positively affected by
the internal factors of a firm that motivate CSR, organisational learning for R&D capacity
and technologic strategy plan. R&D intensity and external factors that motivate CSR
activities in a firm are the factors that affect it negatively. The study also revealed that
R&D intensity of the R&D capacity, technologic strategic plan of technology
commercialization capacity and CSR external motivation affects positively on strategic
CSR. From the point of view of stakeholder, the study concluded that based on its relation
with several stakeholders, CSR can generate sustained value. (Oh Seungwoo, Hong
Ahreum, Hwang Junseok, 2017)

Magdalena Madra-Sawick, Joanna Paliszkiewicz, “Information Sharing Strategies in the

Social Media Era: The Perspective of Financial Performance and CSR in the Food
Industry”, 2020, explored the relation among report of CSR and the financial
achievements of the companies under food industry. The study examined the relation
between the publication of CSR report and the financial performance of the company.
The study considered those companies in which customers and the stakeholders

12
continuously encourages CSR. The study took 448 food companies as its sample and
collected the data from the year 2009 to 2020. They used profitability ratios, dividend
payout ratios, price-to-earnings ratios and market capitalisation in order to analysis the
collected data. Return on Equity (ROE), Return on Assets (ROA), dividend payout ratios
and price-to-earnings ratios were taken as financial performance measurement. The results
of the analysis concluded that CRS reporting plays a vital role in distinguishing the
companies from the point of view of profitability, market capitalisation, share price and
Return on Equity (ROE). The report of CSR practices of a company act as a sign of having
a healthy financial position for the investors and also as a signal that the company is able
to perform its CSR along with maintaining its financial performance. On the basis of their
findings the researchers come to the conclusion that the companies with the higher values
of profitability and market capitalisation are more able to invest in CSR in comparison to
small and new companies. (Magdalena Madra-Sawick, Joanna Paliszkiewicz, 2020)

Nneka Jane-Frances Ibida, NA Emeka-Nwokeji, “Effect of Corporate Social

Responsibility (CSR) on Financial Performance of Oil and Gas Companies in Nigeria”,
2019, studied the impact of Corporate Social Responsibility (CSR) on the financial
performance of oil and gas companies in Nigeria. To analysis the impact, they randomly
selected the active oil and gas firms listed on the Nigerian Stock Exchange and collected
data from the financial report of the selected firms from the year 2006-2015. In order to
conduct study the researchers considered ethical responsibility which was measured by
adding expenditures of social donations, economic responsibility which was measured by
earnings per share and legal responsibility which was calculated by added remuneration of
directors, auditors fee, tax paid, interest expenses and cost of the staff as independent
variable and financial performance as dependent variable. Correlation and regression were
used as analysis tools. The results of research showed that the relation between legal CSR
and ethical CSR with the company performance was negative whereas relation between
economic CSR and company performance was positive. The research suggested that
economic CSR should be encouraged as it has positive relation with the performance of oil
and gas firms in Nigeria. (Nneka Jane-Frances Ibida, NA Emeka-Nwokeji, 2019)

13
2.2. National reviews

Gautam Richa, Singh Anju, Bhowmick Debraj, “Demystifying Relationship between

Corporate Social Responsibility (CSR) and Financial Performance: An Indian Business
Perspective”, 2016, considered CSR as desirable approach to reduce risks, enhance value
of brand, improve transparency and also positively impact the financial condition of the
business. The study explored the relationship among CSR disclosure and the financial
performance of the business and analysed that the disclosure of CSR ultimately aimed at
the increment in the financial performance of the firm. The researchers used exploratory
approach to examine the trends and practices along with multiple regression modelling
techniques used statistical approach also. In order to evaluate the relationship between
CSR disclosure and the financial performance of the business the researchers collected
data from 214 Indian companies from the 2008 to 2010. Profit after Tax (PAT), Return on
Capital Employed (ROCE) and Return on Assets (ROA) considered as the measurements
of financial performance. The results of the study concluded that there is a positive
relation between CSR disclosure and the financial performance of the business which
indicate that better financial performance results in improved CSR and vice versa. The
study also concluded that there is insignificant impact of factors of size and industry sector
on the relationship between CSR disclosure and the financial performance of the business
and vice versa. (Gautam Richa, Singh Anju, Bhowmick Debraj, 2016)

Patjoshi Pramod Kumar, Nayak Umakanta, “Impact of CSR on Financial Performance: A

Study on Banking Companies in India”, 2020, investigated impact of CSR contribution on
the financial performance of selected Indian banking companies including Axis Bank, Yes
Bank, Kotak Mahindra Bank, ICICI Bank, HDFC Bank, Indusind Bank and Federal Bank.
To evaluate the contribution, the researchers collected data from of financial statements
and reports of the selected banks from the financial year 2014-15 to 2017-18. Net Profit
Margin (NPM), Return on Equity (ROE), Return on Total Assets (ROTA) and Return on
Investment (NOI) were taken as the measurement of financial performance and applied
Descriptive Statistics, Correlation and Regression Analysis. The examination results that
none of the selected banking companies was able to maintain the suggested 2%
contribution on their CSR in the selected financial years. The results correlation analysis
concluded that CSR contribution and Return on Total Assets (ROTA) has a positive

14
correlation whereas negative with Net Profit Margin (NPM), Return on Equity (ROE) and
Return on Investment (ROI). The results of regression analysis concluded that there is no
significant relation among contribution of CSR and financial performance from the point
of view of NPM and ROTA while the point of view of ROE and ROI there is a significant
relation in the banking companies in India. (Patjoshi Pramod Kumar, Nayak Umakanta,
2020)

Dhingra Deepika, Mittal Rama, “CSR Practices in Indian Banking Sector”, 2014, analysed
the initiatives taken by commercial banks in the context of India. The researchers
evaluated the action of several banks in India included Small Industries Development
Bank of India (SIDBI), State Bank of India (SBI), Industrial Credit and Investment
Corporation of India (ICICI), Industrial Development Bank of India (IDBI), Yes Bank,
Axis Bank and Housing Development Finance Corporation (HDFC) in their study. The
results of their investigation disclose that only few banks report their activities of CSR.
The study found that among the banks who report their activities, some banks are also
there that make falsely indication of their concern related to socio-environmental issues.
Most of the banks take CSR as the tool of marketing and give only appearance of making
efforts in that direction. According to the study the number of banks is very less who
clearly defined the philosophy of CSR. The research suggested that there is a need to
taking voluntary action by the financial institutions in the direction of fulfilling their
responsibility towards CSR. The study also recommended that banks should clearly
identify their responsibility of CSR as they have the capacity to assist social responsibility
and obtain sustainability. (Dhingra Deepika, Mittal Rama, 2014)

Aggarwal Priyanka, “Impact of Corporate Governance on Corporate Financial

Performance”, 2013, examined the effect of Corporate Governance on Corporate Financial
Performance in the context of India. 20 companies listed in S&P CNX Nifty 50 index
considered as sample. The researcher applied several tools of testing such as regression
analysis, correlation analysis, t- test and f-test. The study included data from the financial
year 2010-11 to 2011-12. The researcher studied several components of Corporate
Governance such as size of the board, independence of board from management,
separation of board from management, financial expertise of directors, number of board

15
meetings, committees of the board and role of external auditors. The researcher has taken
Return on Assets (ROA), Return on Equity (ROE), Return on Capital Employed (ROCE)
and Profit before Tax (PBT) as the proxy of corporate financial performance. By analysing
the data the researcher come to the conclusion that Corporate Governance has a positive
impact on Corporate Financial Performance of the companies and the findings of the study
support company decision to improve governance structure. (Priyanka, 2013)

Tigari Harish, “Role of Reliance Industries Limited towards corporate social

Responsibility”, 2017, scrutinized the steps taken by Reliance company in India and
examined the correlation between Corporate Social Responsibility (CSR) and financial
performance. Spending of the company on the activities of CSR from the financial year
2016-17 to 2010-11 was taken by the researcher. To measure the financial performance
net profit, net sales revenue and total assets of the concern company was taken for the
study. The researcher used correlation analysis to understand the link between Corporate
Social Responsibility (CSR) and financial performance. The results of the examination
concluded that Reliance Limited successfully fulfil its responsibility of CSR. The
company spend its part of profit in each major section that needs help and improvement
such as rural transformation, healthcare, education, environment, etc. By evaluating all
these aspects the researcher concluded that the relation CSR with net profit, net sales
revenue and total assets is positive where the degree of correlation between CSR and net
profit is very strong and relation between CSR and total assets is strong only. The
researcher concluded that CSR plays a vital role in the financial performance of the
company. (Tigari, 2017)

Rajput Neeru, Batra Geetanjali, Pathak Ruchira, “Linkig CSR and financial performance:
An empirical validation”, 2012, analysed CSR and financial performance in order to
understand the relation among CSR and financial performance in the context of India. The
researchers used regression analysis and correlation analysis as the tools to study the CSR
and financial performance data which has being taken from the annual reports of 500
Indian companies from the financial year 2008-2009 to 2009-2010. For measuring the
financial performance of the concern companies, sales revenue and net profits figures were
considered for the study. The researchers also look into consideration several studies done

16
previously on the relationship between Corporate Social Responsibility (CSR) and
financial performance empirically. To evaluate the impact of CSR on financial
performance, sales and profit were taken as dependent variables and CSR was taken as
independent variable whereas to evaluate the effect of financial performance, CSR was
taken as dependent variable and sales and profit were taken as independent variable. The
result of correlation analysis show that there is a moderate degree of positive correlation
between the CSR and financial performance and the result of regression analysis show that
those firm spend more on the activities of CSR whose average sales and average profit is
more. The researchers on the basis of their findings concluded that financial performance
of the firm improves with the expenditure on CSR. (Rajput Namita, Batra Geetanjali,
Pathak Ruchira, 2012)

Agarwal Om Prakash, Bansal Prateek Kumar, Kathpal Shashank, “Effects of Financial

Performance on Corporate Social Responsibility (CSR) and Stock Price: A Study of BSE
Listed Companies”, 2020, evaluated the impact of financial performance on CSR and
price of Stock as financial performance and CSR play a vital role in the operation of the
firm and price of stock has the capacity to affect the capitalisation of the company. The
researchers selected top 30 companies listed in BSE as the sample. CSR expenditure, stock
price and accounting ratios related data have been collected the financial year 2014-15 to
2017-18. The researchers applied correlation analysis and regression analysis to evaluate
the collected data. Several factors have their impact on the decision making process
regarding CSR spending and influence price stock that were examined in the study. The
conclusion derived from the research was that size of the firm (which was taken as net
sales in the study) is the major component of the financial performance which has its
impact on the spending on the Corporate Social Responsibility (CSR) whereas accounting
information of the firm such as profitability and Earning per Share (EPS). The researchers
concluded that no relation between Corporate Social Responsibility (CSR) and Stock Price
found in the study. (Agarwal Om Prakash, Bansal Prateek Kumar, Kathpal Shashank,
2020)

Verma Shweta, “Why Indian Companies Indulge in CSR?”, 2011, scrutinised the
importance of CSR, views and motivation of adoption of CSR by the companies and the

17
ways of performing CSR activities in the context of Indian companies. In order to make
the study more reliable, data has been collected from both primary and secondary sources
by the researcher. By analysis the collected data, it was found that there was lack of
consciousness among the investors about the advantages of social activities performed by
the companies. Most of the investors were concerned more about the profit from their
investments. The study also indicated that the investors of special class invest more on
social activities and usually they does not taken out their funds from such activities as their
motive is not to earn profit from that fund. Those kinds of investors are less in number.
Most of the investors believed that the company should fulfil its social responsibility by
maximum their return on their investments and it will affect their returns, if the company
spend its part of profit on other social activities. From the observation the researcher
concluded that there is a lack popularity of CSR in India as investors does not want to
reduce their return on investment. Along with this, the researcher also concluded that there
are lot of factors that can motivates the companies to adopt CSR as it will help them in
long-term sustainability, build healthy image which make them more competitive in the
market. The study recommended that there are various techniques of discharging society
responsibility. (Verma, 2011)

P Srikanth, Prakash Nisha, “Does CSR Impact Financial Performance of IT Companies in

India?- An Analytical Inquiry”, 2019, evaluated the effect of CSR spending financial
performance of IT companies in India. The researchers collected financial data from the
financial year 2015 to 2019. Return on Assets (ROA), Return on Net worth (RONW) and
Return on Capital (ROC) as the proxy of financial performance. Beside CSR and financial
performance, the researchers also included other variables such as size of the firm,
leverages, R&D intensity and profitability in the study. To evaluate the data, regression
analysis was used as a tool of analysis. From the examination of the collected data, the
research indicated that CSR and financial performance of IT companies in India has a
positive relationship. According to the study, CSR established a positive relationship with
the measures of financial performance such as Return on Assets (ROA), Return on Net
worth (RONW) and Return on Capital (ROC). This relationship plays a vital role for the
companies to encourage the CSR spending further. The study recommended that the
organisation should make use of the efficient tool of CSR in policy making which help the

18
organisation to get health financial and sustainable performance in the IT sector. (P
Srikanth, Prakash Nisha, 2019)

Kumar Naveen, “Impact of CSR on Financial Performance of Public Limited Companies-

A Case Study of ONGC and IOCL”, 2020, analysed the effect of Corporate Social
Responsibility (CSR) on financial performance of Oil and Natural Gas Corporation
(ONGC) and Indian Oil Corporation Limited (IOCL). The researcher used correlation
coefficient analysis and t-test as tools to evaluate the link among Corporate Social
Responsibility (CSR) and financial performance and referred sales and net profit as the
proxy of financial performance. Data for the study has been collected from the financial
year 2014-15 to 2018-19. The findings of the study concluded that CSR plays a crucial
role for the organisation and it has continuously increasing its value. CSR engaged
organisations are preferred by people and they are ready to pay higher amount for their
products. According to the results of the correlation analysis, there is a positive but
moderate degree of correlation between net profit and CSR of both the public limited
companies whereas the results of t-test revealed that CSR and net profit has no significant
relation in both the selected companies. With sales as measure of financial performance,
the result shows that sales and CSR has moderate positive correlation and t-test results,
there is no relation between them in the case of ONGC while in the case of IOCL, there is
very high correlation between sales and CSR in result of both the analysis. The study
concluded that CSR is not only the factor that influences sales and net profit, other factors
are also there that have that ability to affect them such as structure of the organisation,
goodwill, process of decision making by governing body and performance of the
organisations in other field. The research recommended that the organisation should give
proper attention and care to these factors also. (Kumar, 2020)

19
Chapter3: Research Methodology

3.1 Objectives of the study

3.2 Research Hypotheses

3.3 Scope of the Study

3.4 Limitation of the study

20
Chapter 3: Research Methodology

3.1. Objective of the study

1. To identify the prominent activities undertaken by the Tata Motors under its CSR
2. To find out whether there is any significant relationship between the cost of CSR
activities and financial performance of Tata Motors
3. To know whether corporate social responsibility is beneficiary for the financial
performance of the organisation

21
3.2. Research hypotheses
The hypothesis for the study is that the CSR activities have an impact on the financial
performances. Based on this the researcher has set the following alternative hypotheses
for testing:
H11- There exist a significant relation between net revenue and Corporate Social
Responsibility expenditure of the organisation
H12- There is a significant correlation between total assets and Corporate Social
Responsibility expenditure of the organisation
H13- There is a significant correlation between total profit and Corporate Social
Responsibility expenditure of the organisation

22
3.3. Scope of the study

CSR is the company’s sense of responsibility towards the community and the
environment (both ecological and social) in which it operates. The organisation can fulfil
this responsibility through various ways such as waste and pollution reduction processes,
by contributing educational and social programs, by being environmental friendly, etc. It
is not merely donation and charity but a way of conducting business by which corporate
entities visibly contribute to the welfare of the society (Singla, 2018). For the study,
financial data of a leading global automobile manufacturing company, Tata Motors had
taken and analysed. Financial data include net revenue, total assets and net profit/Loss of
the concern from the year 2017-18 to 2019-20. This financial data will compared with the
spending by respective business organisation on CSR.

23
3.4. Limitation of the study
The limitation of the study is that it includes only one company which can restrict the
results of the study to a boundary. The researcher has collected data from the financial
and Corporate Social Responsibility (CSR) reports published on the website of Tata
Motors which compiled the data from the perspective of the company as ground reporting
of the available data was not done by the researcher. The study concentrates primarily on
secondary data. Another limitation of the study is that it considered CSR effects on the
financial performance of the company and disregarded the effect of other factors that can
also have the capacity to influence the financial performance of the organisation, such as
the size of the company, goodwill, performance of the company in other activities,
ownership of the organisation, etc. As selected company had losses in the financial year
2017-18 and 2019-20, the study is unable to depict the true relationship between CSR and
Net Profit.

24
Chapter4: Data representation and Analysis

4.1 Data representation and interpretation

4.2 Hypotheses Testing

25
Chapter 4: Data representation and analysis

4.1 Data representation and interpretation

Table: 4.1.1 Corporate Social Responsibility practices in Tata Motors

Sector in which the Cumulative spent up to reporting period (in Crore)

project is covered 2017-18 2018-19 2019-2020
Skill Development 4.52 5.66 5.63
Promoting Education 10.43 8.68 9.59
Health services 2.90 4.19 5.59
Environment 1.38 1.24 1.22
Rural development 1.00 1.66 0.35
Safe Drinking water 0.60 0.65 -
Other expenses 0.60 0.32 0.53
Total 21.43 22.40 22.91
Source: (Tata Motors)

Skill Development: The Employability (Skill Development) programmes of Tata Motors

trains unemployed youth in three areas: automotive sector, non-automotive sector and
agriculture and related practises. It concentrates primarily on skills in driving and motor
mechanics, where Tata Motors has domain experience and business ties. People find ready
jobs either within Tata Motors' ecosystem or on the open market after completing their
preparation, the majority of which are NSDC certified. Tata Motors also works with
community-based women's and farmer's groups to help them raise additional income through
agriculture and related initiatives.

Promoting Education: Tata Motors educational programmes are designed to help students
learn holistically at the secondary school level. A tailored solution has gone a long way
towards enhancing scholastic achievement and instilling trust in children by instituting need-
based rolling scholarships/financial resources for financially disabled pupils, arranging
support courses for challenging subjects, value-based life skills, athletics and other co-
curricular events and plugging infrastructure holes in classrooms. In these systems, creativity
has become a way of life and most schools and students are very familiar with the technology
that is now available at their fingertips.

26
Health services: The health programmes of Tata Motors are aimed at children aged 0 to 6
years old who are malnourished. Apart from supplying malnourished children with
supplemental diets and supplements, the emphasis has been on prevention interventions such
as enabling behavioural improvements in families, particularly among young mothers and
caregivers, through awareness sessions and the provision of ante-natal and post-natal
services. Tata Motors strengthens structural distribution mechanisms by strengthening the
capabilities of government employees on the one side, while mentoring societies to take
control of programmes on the other.

Skill
Development

Health Promoting
services Education

CSR

Environment Safe
Drinking
water
Chart: 4.1.1

Environment: As part of their environmental stewardship, Tata Motors are concentrating

their energies on the green cover by sapling planting on the one hand, and increasing citizen
environmental consciousness on the other. They also urge residents to use environmentally
friendly and renewable energy sources. Tata Motors also leads efforts at the state and national
levels to respond to disasters. Rescue, recovery and healing are also examples of
interventions.

Safe Drinking water: In a 2016 survey by Water Aid, India was ranked among the poorest
countries in the world for the number of people without access to clean drinking water. In
India, an estimated 76 million people do not have access to clean drinking water. According
to the Asian Development Bank, India will have a 50 percent water shortage by 2030. In
India, it is estimated that waterborne diseases cost the country about USD 600 million per

27
year. In response to this situation, Tata Motors initiated Amrutdhara, the National Drinking
Water Programme, in 2010 through its company-owned NGO, Sumant Moolgaokar
Development Foundation (SMDF). Amrutdhara's aim is to offer a long-term drinking water
solution to water-stressed areas of the region. These solutions, which vary from irrigation
wells or ‘nullah' schemes in the hills to trapping water trapped in aquifers to providing large
water reservoirs, depend heavily on conventional water storage and management activities of
the societies.

Other initiatives: The Affirmative Action Program at Tata Motors demonstrates the
company's dedication to inclusive development. They also developed their affirmative action
(AA) initiative to counter the existing social inequities in India by promoting constructive
discrimination for the Scheduled Castes and Scheduled Tribes (SC/ST) groups, similar to the
Tata Group's Affirmative Action (AA) Policy. They advocate the integration of minorities,
PWDs, and SC/ST cultures in addition to SC/ST Communities.

Graph: 4.1.1

CSR Spend (IN Crore)

23.5

23

22.5

22
CSR

21.5

21

20.5
2017-18 2018-19 2019-20

Source: (Tata Motors)

Tata Motors Limited recognises its origins and relentlessly works to address the needs and
desires of the society, bringing others forward to growth. CSR approach of Tata Motors
addresses social needs from pre-natal care to education, which represents people from all

28
walks of life-from high school students to professionals and eventually, this can contribute to
employability and employment. (Tata Motors)

Table: 4.1.2 Financial Performance and CSR of Tata Motors

Year Revenue Total assets Net profit Cost of CSR

2017-18 61182.29 59212.30 (1034.85) 21.43
2018-19 71757.42 60909.63 2020.60 22.40
2019-20 45311.22 62589.87 (7289.63) 22.91
Source: (Tata Motors)

Note:

1. Revenue includes both revenue from operations and other income.

2. Net profit is the Profit After Tax (PAT).

29
4.2 Hypotheses testing

In order to ascertain whether there exists any relationship between CSR and financial
performance and to test the hypotheses, Karl Pearson’s coefficient of correlation is used by
the researcher. Correlation analysis is a very important technique in statistics which help to
express the relationship between the variables numerically. To determined the relation, Net
Revenue, Net Profit and Total Assets considered as the representative of financial
performance of Tata Motors.

H11- There exist a significant relation between Net Revenue and Corporate Social
Responsibility expenditure of the organisation

To evaluate the relation between Net Revenue and CSR, Net Revenue is taken as dependent
variable which is represented by X and CSR is taken as independent variable which is
represented by Y.

X Y dx= X-X̅ dy= Y-Y̅ d2 x d2 y dx dy

61182.29 21.43 1765.31 -0.82 3116319.40 0.67 -1447.55
71757.42 22.40 12340.44 0.15 152286459.39 0.02 1851.07
45311.22 22.91 - 0.66 198972465.18 0.44 -9309.80
14105.76
∑X=178250.93 ∑Y=66.74 -0.01 -0.01 ∑ d2x ∑ d2y= ∑dxdy=(-
=354375243.97 1.13 8906.28)
Table: 4.2.1

Where,
∑X
X̅ = = 59416.98
𝑁

∑Y
Y̅ = = 22.25
𝑁

N=3

Karl Pearson’s coefficient of correlation (r),

∑𝐝𝐱𝐝𝐲
r=
√∑𝐝𝟐𝐱∗∑ 𝐝𝟐𝐲

Therefore, r = -0.445

30
The value of ‘r’ lies between -.75 and -.25, the degree of correlation between Net Revenue
and Corporate Social Responsibility expenditure of the organisation is moderate negative.

H12- There is a significant correlation between total assets and Corporate Social
Responsibility expenditure of the organisation

To compute the relation between Total Assets and CSR, Total Assets is taken as dependent
variable which is represented by X and CSR is taken as independent variable which is
represented by Y.

X Y dx= X-X̅ dy= Y-Y̅ d2 x d2 y d x dy

59212.30 21.43 -1691.63 -0.82 2861612.06 0.67 1387.14
60909.63 22.40 5.7 0.15 32.49 0.02 0.86
62589.87 22.91 1685.94 0.66 2842393.68 0.44 1112.72
∑X=182711.8 ∑Y=66.74 0.01 -0.01 ∑ d2 x ∑ d2y= ∑ dx dy
=5704038.23 1.13 =2500.72
Table: 4.2.2

Where,
∑X
X̅ = = 60903.93
𝑁

∑Y
Y̅ = = 22.25
𝑁

N=3

Karl Pearson’s coefficient of correlation (r),

∑𝐝𝐱𝐝𝐲
r=
√∑𝐝𝟐𝐱∗∑ 𝐝𝟐𝐲

Therefore, r = 0.98

The value of ‘r’ lies between .9 and .99, the degree of correlation between total assets and
Corporate Social Responsibility expenditure of the organisation is positively very high.

H13- There is a significant correlation between net profit and Corporate Social
Responsibility expenditure of the organisation

31
 To determine the relation between Net Profit and CSR, Net Profit is taken as dependent
variable which is represented by X and CSR is taken as independent variable which is
represented by Y.

X Y dx=X-X̅ dy=Y-Y̅ d2 x d2 y dx dy
(1034.85) 21.43 1066.44 -0.82 1137294.27 0.67 -874.48
2020.60 22.40 4121.89 0.15 16989977.17 0.02 618.28
(7289.63) 22.91 -5188.34 0.66 26918871.96 0.44 -3424.30
∑X=(-6303.88) ∑Y=66.74 -0.01 -0.01 ∑ d2x =45046143.4 ∑ ∑ dx dy=( -
d2y= 3680.5)
1.13
Table: 4.2.3

Where,
∑X
X̅ = = (-2101.29)
𝑁

∑Y
Y̅ = = 22.25
𝑁

N=3

Karl Pearson’s coefficient of correlation (r),

∑𝐝𝐱𝐝𝐲
r=
√∑𝐝𝟐𝐱∗∑ 𝐝𝟐𝐲

Therefore, r = -0.52

The value of ‘r’ lies between -.75 and -.25, the degree of correlation between net profit and
Corporate Social Responsibility expenditure of the organisation is moderate negative.

32
Chapter 5: Results and discussion

5.1 Major Findings

5.2 Discussions and Suggestions

5.3 Conclusions

33
Chapter 5: Results and discussion

5.1 Major Findings

Results of the calculation

Hypothesis Value of “r” Relationship

There exist a significant relation -0.445 Moderate negative
between net revenue and CSR
There is a significant correlation 0.98 Very high positive
between total assets and CSR
There is a significant correlation -0.52 Moderate negative
between net profit and CSR
Table: 5.1.1

Net Revenue and CSR: Table: 5.1.1 revealed that the value of coefficient of correlation (r)
between Net Revenue and CSR is -0.445 which show that there is an existence of a
relationship between Net Revenue and CSR of Tata Motors but the degree of correlation is
moderate negative. Therefore on the basis this result, the hypothesis (H 11) which states that
there exist a significant relation between net revenue and CSR is accepted.

Total Assets and CSR: The result appears in table: 5.1.1 show that the value of coefficient
of correlation (r) between Total Assets and CSR is 0.98 which indicates that there exist a very
high degree of positive correlation between Total Assets and CSR of Tata Motors. This result
reflects that the hypothesis (H12) which states that there is a significant correlation between
total assets and CSR is accepted.

Notes:

1. Tata Motors is having additions in property, plant and equipment of Rs. 2491.82 crore in
the financial year 2017-18, of Rs. 2225.13 crore in the financial year 2018-19 and of Rs.
3517.93 crore in the financial year 2019-20.

2. Tata Motors acquired assets of Rs. 29.06 crore on purchase of business of a subsidiary
company in the financial year 2018-19.

Net profit and CSR: Table: 5.1.1 revealed that the value of coefficient of correlation (r)
between Net Profit and CSR is -0.52 which implies that the relationship is exist among Net

34
Profit and CSR of Tata Motors but the degree of this correlation is moderate negative.
Therefore the hypothesis (H13) which states that there is a significant correlation between net
profit and CSR is accepted.

Chief areas of CSR activities: The chief areas of CSR activities in which Tata Motors has
spend more were the areas such as education promoting activities, skill developing activities
and activities related to health services. The company spend 28.7 crore from the year 2017-18
to 2019-20 on the activities promoting education and 15.81 crore and 12.68 crore on the
activities related to skill development and health services.

Graph: 5.1.1

Number of lives

2019-20

2018-19
Number of lives

2017-18

0 200000 400000 600000 800000 1000000

Source: (Tata Motors)

Tata Motors by their CSR activities provides benefits to the society in different sectors. The
company support the community and assist them in the increasing their livelihood and
improving their way of living. Graph: 5.1.1 depicted the number of lives touched by Tata
Motors through their initiatives of CSR. This number of lives is constantly increasing from
the financial year 2017-18 to 2019-20. Tata Motors benefited 644000 lives in the year 2017-
18, 732700 lives in the year 2018-19 and 830300 lives in the year 2019-20.

35
5.2 Discussions and suggestions

Revenue

Moderate negative

CSR

Moderate negative Very High positive

Net Total Assets

Profit/Loss

Chart: 5.2.1

The researcher observed activities of CSR performed Tata Motors from the financial year
2017-18 to 2019-20. The result of this observation states that Tata Motors performed CSR
activities in each section of society which needs help and improvement. The study also
examines the relationship between CSR and financial performance of Tata Motors. Net
Revenue, Total Assets and Net Profit considered as the representative of financial
performance of Tata Motors. In order to evaluate that the relationship, Karl Pearson’s
coefficient correlation applied in the study. The results of the calculation states that there
is existence of relationships between the representatives of financial performance and
CSR, in which there is a very high degree of positive correlation in the case of Total
Assets and CSR whereas moderate degree of negative correlation in the case of Net
Revenue and CSR and Net Profit and CSR. On the basis of literature results, it can be
considered that some other factors such as type of industry, size of the firm, ownership,
goodwill, performance of the company in other activities, etc. are also there that may
influence the financial performance of the company. This can be the reason behind the

36
moderate degree of negative correlation between Net Revenue and CSR and Net Profit
and CSR. The study suggested that as there is an existence of relationship between
Corporate Social Responsibility (CSR) and financial performance, the company should
perform its CSR activities in such a way that it should influence the financial performance
of the company in a positive way. There is need of preparing a successful and strategic
plan to execute the activities of CSR and build a strong relation with the stakeholders by
the organisations. An effective CSR plan will definitely helps the company in its long
term success.

Graph: 5.2.1

80000

70000

60000

50000

40000 Net Profit

Total Assets
30000
Net Revenue
20000
CSR
10000

0
2017-18 2018-19 2019-20
-10000

-20000

Source: (Tata Motors)

37
5.3 Conclusion

On the basis of observation it may be concluded that CSR is a company's strategy for
achieving long-term success by providing fiscal, social and environmental benefits. The
observation of the literature revealed that CSR is an important responsibility taken by the
business organisations which help them in their long term survival. The researcher has
examined the CSR activities performed by Tata Motors from the year 2017-18 to 2019-
20. Tata Motors does praiseworthy job in almost all aspects of society, such as social,
environmental and economic aspects. The company engaged in the activities of CSR from
its existence and help in the improvement of the society and environment. The researcher
applied Karl Pearson’s coefficient correlation to evaluate the linkage between CSR and
financial performance of Tata Motors and found there is a very high degree of correlation
between Corporate Social Responsibility (CSR) and Total Assets of Tata Motors whereas
in the case of Corporate Social Responsibility (CSR) and Net Revenue and Corporate
Social Responsibility (CSR) and Net Profit there is a moderate negative correlation. The
study concluded that there is a linkage between CSR and financial performance. The
study therefore recommended that CSR has the capacity to influence the financial
performance of the company, only an effective and efficient CSR plan is required by the
organisations for their immense success. CSR is an important factor in the sustainable
long term development of the company.

38
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