Are there areas where a company can ignore social pressure?
Now let’s take the 2,000 firms in the study and divide them up into two categories. One category would be firms that face the consumer, what we would generally refer to as consumer products companies. Let’s call the other firms, those that generally sell to other businesses, industrial products companies. When we do our regression analysis on those two groups separately we find quite a difference in the relation between corporate financial performance and corporate social performance. For the consumer goods companies, the relation between corporate financial performance and corporate social performance is an increasing function. If you looked across all those consumer products firms, the ones that had the highest corporate social performance tend to have the highest corporate financial performance as well, and vice versa. If you looked at industrial products companies, that line goes down. Firms that have the highest social performance tend to have the worst corporate financial perform
