Modelling the Cost-Benefits of Corporate Social Responsibility (CSR) for decision making in the Aviation Industry

摘要

Though intangible in nature, Corporate Social Responsibility (CSR) is increasingly becoming a necessary requirement for firms in the aviation industry. The aim of this paper is to analyze the Cost and Benefits (CB) of CSR investments and to find the point of convergence for prudent economic performance. The paper models the economic mechanisms behind CSR based on the microeconomic concept, thus a cost-benefit Analysis (CBA) for decision-makers in the aviation industry. The paper concludes that the microeconomic underpinnings of CBA provide an understanding of the mechanisms and incentives behind the behaviour of socially responsible firms in the aviation sector. It is revealed that, aside the intangible nature of CSR assets, the reason for the reluctance of many aviation firms to investment in CSR is the perceived imbalance between such investment (cost) and the revenue or direct profits derived by the firm. The implication of the analysis is that there should be an equilibrium investment point for CSR policies in order for aviation firms to be encouraged to invest in CSR projects.