International Journal of Humanities Social Sciences and Education (IJHSSE) Volume 1, Issue 12, December 2014, PP 106-114 ISSN 2349-0373 (Print) & ISSN 2349-0381 (Online) www.arcjournals.org ©ARC Page 106 Corporate Social Responsibility and Organizational Performance: A Theoretical Review Tabitha Nasieku Dept of Economics, Accounts and Finance Jomo Kenyatta University of Agriculture and Technology Juja, Kenya. tabithanasieku@gmail.com Olaroyeke Ranti Togun Dept of Economics, Accounts and Finance Jomo Kenyatta University of Agriculture and Technology, Juja, Kenya royeketogun@yahoo.com Eunice Mojirike Olubunmi Dept of Economics, Accounts and Finance Jomo Kenyatta University of Agriculture and Technology, Juja, Kenya accountancyontop@yahoo.com Abstract: Achieving organizational objectives in the long run and maximum organization performance and effectiveness, requires giving full attention to corporate social responsibility (CSR). The societies where business is located occupy a central place in corporate culture affecting the firm performance thus necessitating change in the internal organization structures, processes and behavior. A theoretical review of CSR practices revealed a strong link between a firm’s CSR practices and its performance. Keywords: Corporate social responsibility, organizational performance, stakeholders. 1. INTRODUCTION The concept of corporate social responsibility (CSR) is not new; discussion about it began since the 1950s and has since continued to grow in importance and significance. It has been subjected to a lot debate, comment, and research. In spite of the seeming endless discussion about it, it has seen a lot of development in both academic and practitioner communities all over the world (Carroll and Shabana, 2010). CSR is a concept whereby firms commit to improve their environmental and social performance beyond legal obligations. It is a commitment to improve the well being of a community through discretionary business practices and contributions of corporate resources (Charkraborty (2010). It is the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve quality of life, in ways that are both good for business and good for development (Korkchi and Rombaut, 2006). Performing CSR is necessary for firms that want to be successful in the long run (Korkchi and Rombaut, 2006). Fundamentally, CSR internalizes all external consequences of an action, both its costs and benefits. The term CSR encompasses a variety of issues revolving around companies‟ interactions with society. This study is motivated by the fact that as the global business world is getting more competitive by the day due to globalization and technological change, only the effective will continue to maintain the top position and gain competitive advantage. 2. EMPIRICAL REVIEW Despite worldwide discussion on the need and benefits for CSR, there are opposing views to the pursuit of CSR activities by companies as revealed by the studies reviewed in this paper. Empirical studies of the relationship between CSR and financial performance comprise essentially two types. The first uses the event study methodology to assess the short-run financial impact (abnormal returns) when firms engage in either socially responsible or irresponsible acts. The