Exploring Corporate Social Responsibility (CSR) and Firm Performance Linkage: The Mediating Role of Entrepreneurial Orientation and Organizational Capability

Purpose: This study aims to determine whether corporate social responsibility impacts firm performance and what role entrepreneurial orientation and organizational capability play in this relationship in the RSIA hospital in East Java, Indonesia. Design/methodology/approach: This research analyzes data from 67 hospital industries in East Java, Indonesia. Our hypotheses are tested using survey data from 67 respondents who are owners and managers of the RSIA hospital that were analyzed using PLS software. Findings: CSR empirically fails to have an impact on improving firm performance. The other findings reveal that CSR does not have an impact on entrepreneurial orientation but CSR does influence organizational capability. Further analysis shows that the results of indirect effects reveal that entrepreneurial orientation empirically fails to strengthen CSR - firm performance relationship. Meanwhile, the results of mediating role of organizational capability show that organizational capability empirically mediates CSR - firm performance linkage. Research limitations/implications: Practical implications: firstly, firms need to be more socially responsible to be able to improve their performance. Secondly, firms need to enhance the monitoring of CSR practices to assure the appropriate oversight of CSR practices. Third, the owners and directors of hospital industry must be able to see the sights groundbreaking strategies for integrating CSR into the nucleus of business operations. Originality/value: This research provides insights into how entrepreneurial orientation and organizational capability mediate CSR - firm performance linkage in the RSIA hospital in East Java, Indonesia. It also provides insights into how CSR empirically impacts on firm performance in in the RSIA hospital in East Java, Indonesia. This study contributes to the CSR literature by providing empirical evidence of the negative sides of entrepreneurial orientation on the connection between CSR and firm performance and negative sides of direct relationship between CSR and firm performance in the hospital industries, East Java, Indonesia.