The Effect of Contextual Variables in the Rela tionship between CSR and CFP: Evidence from  Indonesian Companies

Hasan Fauzi, Kamil M. Idris

Abstract

The objectives of this study is to investigate whether business environment, business strategy,
formalization, decentralization, reliance on combination of belief & boundary system, reliance
on combination of diagnostic & interactive control system, reliance on interactive control sys
tem moderate the relationship between CSR and CFP under the slack resource and good man
agement theories. 220 respondents from manufacturing companies listed on the Jakarta Stock
Exchange were selected and two regression models were developed to examine the relationship
between the related variables. The findings show that business environment has moderated the
CSR-CFP link under good management theory, decentralization has moderated the CSR-CFP
link under slack resource theory, and reliance on combination of diagnostic and interactive con
trol system has moderated the CSR and CFP link based on slack resource theory.

Keywords:

CSR, slack resource theory, good management theory, contextual variables, finan cial performance, business environment, business strategy, Decentralization, formalization, specialization, belief system, boundary system, diagnostic control system, interactive control system, Indonesia.