DOES CSR DISCLOSURE SOLVE SOCIAL CONFLICT AMONG COMPANIES AND COMMUNITY?: AN EMPIRICAL EVIDENCE

Abstract

Corporate social responsibilities (CSR) play important roles in solving social conflict among companies and their stakeholders, including community. Thus, CSR disclosure can be used to show how the companies deals with the conflict. This study aimed to investigate whether CSR programs can be used by companies to solve social conflict among community and companies. We conduct empirical tests using data from community living in the areas closed to companies (Cilegon and Cilacap, Indonesia) and companies' managers─who responded to our survey. The findings shows that CSR disclosures have not been able to decrease social conflict among companies and society. This study indicated that there are differences in the views among companies and communities on the importance of CSR programs. Indeed, CSR programs which are seen as important by the community are not considered as important by the companies. This condition implies that the community is not seen as the important and powerful stakeholder by the companies. Consequently, social conflicts will continue to occur as long as the company does not pay attention to the public interest. The Social conflict can only be reduced if the company fulfill the community interests and show them that companies' activities are legitimate ones and provide the community with some benefits