The Role of Corporate Social Responsibility from Management and Legal Perspectives in Enhancing Corporate Performance

Abstract

Corporate Social Responsibility (CSR) has become an essential strategic instrument that enables organizations to achieve sustainable business performance while fulfilling their social and legal responsibilities. However, previous studies have predominantly examined CSR from either management or legal perspectives separately, resulting in limited understanding of how these perspectives jointly influence corporate performance. This study aims to analyze the role of Corporate Social Responsibility from integrated management and legal perspectives in enhancing corporate performance and to examine the mediating role of legal compliance in this relationship. A quantitative explanatory research design was employed using a cross-sectional survey. Data were collected from 186 managers, CSR officers, legal officers, and senior employees representing companies operating across various industrial sectors in Indonesia. The proposed research model was analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that Corporate Social Responsibility has a significant positive effect on both legal compliance and corporate performance. Legal compliance also significantly improves corporate performance and partially mediates the relationship between CSR and corporate performance. The structural model demonstrates satisfactory explanatory power, indicating that organizations implementing CSR strategically while maintaining strong legal compliance achieve superior organizational performance through enhanced corporate reputation, stakeholder trust, governance quality, and organizational legitimacy. These findings suggest that CSR should not be viewed solely as a philanthropic initiative or a regulatory obligation but as an integrated strategic management capability supported by effective legal governance. This study contributes to the existing literature by proposing an integrated framework that combines management and legal perspectives in explaining sustainable corporate performance. The proposed model also provides practical implications for managers and policymakers in designing CSR strategies that simultaneously improve business competitiveness, regulatory compliance, and long-term organizational sustainability.