The Effect of Company Value and Profitability on Corporate Social Responsibility in Telecommunications Companies on the Indonesia Stock Exchange

Oct 13, 2025 by windailys.com 28 views

The Effect of Company Value and Profitability on Corporate Social Responsibility in Telecommunications Companies on the Indonesia Stock Exchange

Introduction

In today's business world, Corporate Social Responsibility (CSR) has become an essential aspect of a company's operations. Telecommunications companies, in particular, have a significant impact on the community and the environment, making CSR a crucial concern for these companies. This study aims to investigate the relationship between company value and profitability, measured through Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM), and the Corporate Social Responsibility (CSR) of telecommunications companies listed on the Indonesia Stock Exchange (IDX) in the period 2010 to 2012.

The Importance of Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) is a company's effort to have a positive impact on the community and the surrounding environment. In the context of telecommunications companies in Indonesia, CSR can include various programs, ranging from education, environmental preservation, to social assistance. CSR is not just a moral obligation, but it can also bring long-term benefits to the company and the community. A company that prioritizes CSR is likely to enjoy a positive reputation, increased customer loyalty, and improved employee morale.

Company Value and Profitability

In the business world, company value is often interpreted as an investor perception of the company's ability to create future profits. Meanwhile, profitability, measured by ROA, ROE, and NPM, provides an indication of the operational efficiency and profit generated by the company. However, the results of this study indicate that company value and profitability are not always correlated with the amount of company attention to CSR. This raises questions about the priorities of telecommunications companies in Indonesia. Do they focus on profits at the expense of social responsibility?

The Role of Company Value in CSR

The study found that company value has no significant influence on CSR. This suggests that investors' perception of a company's ability to create future profits does not necessarily translate to a commitment to social responsibility. This is a challenge for investors who are not only looking for financial benefits but also want a positive impact from their investment. Investors need to consider other factors in evaluating corporate social commitment, such as corporate culture and internal policies related to CSR.

The Impact of Profitability on CSR

The study also found that profitability, measured by ROA, ROE, and NPM, has no significant effect on CSR. This suggests that a company's operational efficiency and profit generation do not necessarily translate to a commitment to social responsibility. This is a concern for telecommunications companies in Indonesia, as it suggests that they may be prioritizing profits over social responsibility.

Implications for Companies and Investors

This study illustrates that telecommunications companies in Indonesia, despite having good company value and high profitability, are not automatically committed to social responsibility. This is a challenge for investors who are not only looking for financial benefits but also want a positive impact from their investment. Investors need to consider other factors in evaluating corporate social commitment, such as corporate culture and internal policies related to CSR.

Conclusion

Overall, this research shows that there is an urgent need for telecommunications companies to increase their attention to corporate social responsibility. With the pressure from the community and investors, it is hoped that these companies will not only focus on profits but also consider the social impact of their operations. CSR is not just an obligation, but can be a long-term strategy that brings benefits to the company and the community simultaneously.

Recommendations

Based on the findings of this study, the following recommendations are made:

Telecommunications companies in Indonesia should prioritize CSR as a key aspect of their operations.
Investors should consider CSR as a key factor in evaluating corporate social commitment.
Companies should develop internal policies and corporate culture that prioritize CSR.
The government and regulatory bodies should establish clear guidelines and regulations for CSR in the telecommunications industry.

Limitations of the Study

This study has several limitations, including:

The study only focused on telecommunications companies listed on the IDX in the period 2010 to 2012.
The study only used secondary data, which may not be comprehensive or up-to-date.
The study only measured CSR through a limited number of indicators.

Future Research Directions

Future research should aim to:

Investigate the relationship between CSR and company value and profitability in other industries.
Examine the impact of CSR on company performance and financial outcomes.
Develop a more comprehensive and up-to-date measure of CSR.

References

[List of references cited in the study]

Appendix

[Appendix containing additional data and tables]

Table of Contents

Introduction
The Importance of Corporate Social Responsibility (CSR)
Company Value and Profitability
The Role of Company Value in CSR
The Impact of Profitability on CSR
Implications for Companies and Investors
Conclusion
Recommendations
Limitations of the Study
Future Research Directions
References
Appendix
Frequently Asked Questions (FAQs) about the Effect of Company Value and Profitability on Corporate Social Responsibility in Telecommunications Companies on the Indonesia Stock Exchange

Q: What is Corporate Social Responsibility (CSR)?

A: Corporate Social Responsibility (CSR) is a company's effort to have a positive impact on the community and the surrounding environment. In the context of telecommunications companies in Indonesia, CSR can include various programs, ranging from education, environmental preservation, to social assistance.

Q: What is the relationship between company value and CSR?

A: The study found that company value has no significant influence on CSR. This suggests that investors' perception of a company's ability to create future profits does not necessarily translate to a commitment to social responsibility.

Q: What is the relationship between profitability and CSR?

A: The study also found that profitability, measured by ROA, ROE, and NPM, has no significant effect on CSR. This suggests that a company's operational efficiency and profit generation do not necessarily translate to a commitment to social responsibility.

Q: What are the implications of this study for companies and investors?

A: This study illustrates that telecommunications companies in Indonesia, despite having good company value and high profitability, are not automatically committed to social responsibility. This is a challenge for investors who are not only looking for financial benefits but also want a positive impact from their investment.

Q: What are the recommendations of this study?

A: Based on the findings of this study, the following recommendations are made:

Telecommunications companies in Indonesia should prioritize CSR as a key aspect of their operations.
Investors should consider CSR as a key factor in evaluating corporate social commitment.
Companies should develop internal policies and corporate culture that prioritize CSR.
The government and regulatory bodies should establish clear guidelines and regulations for CSR in the telecommunications industry.

Q: What are the limitations of this study?

A: This study has several limitations, including:

The study only focused on telecommunications companies listed on the IDX in the period 2010 to 2012.
The study only used secondary data, which may not be comprehensive or up-to-date.
The study only measured CSR through a limited number of indicators.

Q: What are the future research directions?

A: Future research should aim to:

Investigate the relationship between CSR and company value and profitability in other industries.
Examine the impact of CSR on company performance and financial outcomes.
Develop a more comprehensive and up-to-date measure of CSR.

Q: What are the benefits of CSR for companies?

A: CSR can bring long-term benefits to companies, including:

Improved reputation and brand image
Increased customer loyalty and retention
Improved employee morale and engagement
Access to new markets and customers
Reduced risk and improved sustainability

Q: What are the benefits of CSR for investors?

A: CSR can bring benefits to investors, including:

Improved financial performance and returns
Reduced risk and improved sustainability
Access to new markets and customers
Improved reputation and brand image
Increased customer loyalty and retention

Q: How can companies prioritize CSR?

A: Companies can prioritize CSR by:

Developing internal policies and corporate culture that prioritize CSR
Establishing clear guidelines and regulations for CSR
Investing in CSR programs and initiatives
Engaging with stakeholders and the community
Measuring and reporting CSR performance

Q: How can investors evaluate CSR?

A: Investors can evaluate CSR by:

Reviewing a company's CSR report and performance
Assessing a company's internal policies and corporate culture
Evaluating a company's engagement with stakeholders and the community
Considering a company's reputation and brand image
Analyzing a company's financial performance and returns