Correlation between social responsibility and efficient performance in Croatian enterprises

The objective of the research is to establish if there is a correlation between efficiency and socially responsible business performance in Croatian enterprises. The research is based on the hypothesis that higher corporate efficiency affects social responsibility development in enterprises and vice versa, that socially more responsible corporate performance have a positive effect on efficiency. In their research, many authors have proved the correlation between social responsibility and financial performance, reputation of the enterprise and added value. Cases from transition countries, which transferred to market economy and focused on socially responsible management and sustainability, have not been the subject of research. The social responsibility concept implies balance between economic, ecological and social goals, which means distribution of assets on several actors, so it may be predicted that more efficient enterprises will sooner accept the sustainability concept and act more responsibly. Except for theoretical social responsibility hypothesis, the initial point in the empirical section is dynamic analysis of business activities of Croatian entrepreneurs in the period between 1993 and 2010, on the basis of which a sample of enterprises was chosen, which submit transparent reports on social responsibility. The main result obtained by univariate analysis confirms that socially more responsible enterprises have better financial results, i.e. they are more efficient, and also have better reputation. The research also had limitations in relation to qualitative determination of the social responsibility impact on efficiency. The conclusion is derived that there is a causal relationship between efficiency and social responsibility, i.e. higher efficiency level enables higher allocation of resources with the purpose of socially more responsible corporate performance and vice versa; socially responsible corporate performance have an impact on reputation and on improved efficiency, measured by financial indicators.