In this chapter, the authors have investigated the effect of CSR on firm value during the pandemic. They used the event study technique and noted that an engagement in the CSR activities increases the stock returns to the hospitality firms during a pandemic crisis. The results showed that the hospitality firms that showed a better stock market performance during the pandemic invested in CSR activities. This would indicate a theoretical application and practical implication on their business duties towards the society, and any future research in CSR would allow them to successfully handle a critical disaster like this pandemic in the future.
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Dr Tedros Adhanom Ghebreyesus, Director-General of World Health Organisation (WHO) said “This is not just a public health crisis; it is a crisis that will touch every sector. So, every sector and every individual must be involved in the fights” (Ducharme, 2020).
The coronavirus pandemic (COVID-19) is described as a huge global health disaster, which can lead to a massive social and economic crisis. The WHO statistics (global values, as of 10:21 am CET, August 10th 2021) showed that the coronavirus infected people all around the world, with 54,075,995 confirmed cases, 1,313,919 deaths and millions of suspected cases (WHO, 2020). The people are struggling and affected by this global health disaster and the resultant financial crisis, caused by the pandemic. People form the foundation of any company (Kucharska & Kowalczyk, 2019), hence, the public health awareness campaigns initiated by the companies reflect their social engagement that increases their Corporate Social Responsibility (CSR) activities during the pandemic (Bapuji et al., 2020; Guerriero et al., 2020).
The SARS-CoV-2 virus has significantly affected the social, economic and health aspects, since all the countries in the world had to implement restraints on the movement and economic activities of the people, to control the spread of the virus. Furthermore, the pandemic affected >32.5 million people and led to >989,000 deaths, until September 2020. From the social and economic perspective, many international organisations stated that this pandemic could show a higher effect on the economic conditions of the countries than the 2008 crisis, and would lead to a 2–3-point drop in their GDP for every month of the confinement. This would further cause the unemployment of >195 million people. Thus, this pandemic would cause serious social issues in many families and along with many liquidity and survival problems for numerous SMEs.
Due to the pandemic, the world witnessed many temporary layoffs since the CEOs of the organisations did not want their firms to bear huge economic issues, and hence designed a plan for facing the economic problems arising due to the movement controls. However, the post-pandemic situation showed that most of the company executives displayed exemplary behaviour, as they adopted CSR policies and activities for fulfilling their economic, social and health needs. Thus, the crisis arising because of the pandemic has altered how the organisations pursued their social, economic, and environmental goals, and they also realised the importance of their societal role. The pandemic has highlighted the fact that the corporations must adapt their CSR strategies such that they could display their commitment to society and to the vulnerable groups, particularly those that were related to them, such as their local environment, where they operated and showed a larger presence. An equilibrium between their good social deeds and profit is regarded as an effective strategy that could help them survive in the future.
Based on the above statements, in this study, we aimed to determine the CSR activities implemented by the large Malaysian companies after the pandemic. We also determined the objectives that were pursued by these companies so that they could understand the benefits that these firms wished to derive in Malaysia, which has been severely affected by the pandemic. In the past, a theoretical framework was developed for categorising the business commitments, which was based on the determination of five business responsibilities, like legal and economic, ethical, commercial, altruistic, and strategic. The results of this study indicated that the companies were very interested in legitimising and protecting the interests of their shareholders and stakeholders. However, a majority of the large Malaysian firms showed a higher altruistic commitment to society and played a vital role in the recovery of the country’s social and economic health. Their commitments, particularly in the financial sector, were combined with their commercial strategies, for deriving maximal benefits in the medium and long term.