CSR and Corporate Relations
In Indonesia, the company is one of the economic actors who have an enormous influence on the state of the economy. Intense competition in this business sometimes make a firm justifies any means to increase profits by pushing all the costs, resulting in corporate social responsibility aside. On the other hand a company should have a responsibility to contribute to all parties of its operations. Concern for the environment surrounding the company realized in the form of Corporate Social Responsibility (CSR).
Awareness about the importance of CSR is a trend among corporations both at global and national levels. This is consistent with the growing concern of corporations on issues of economic, social, cultural and surrounding environment, taking into account social norms and principles of human rights (human rights). The activities carried out within the framework of CSR is a vehicle that can be used to achieve sustainable development goals.
The Awareness
In Indonesia, the awareness of the need to safeguard the environment are governed by the Limited Liability Company Act NO. 40 Article 74 of 2007, which the enterprise carries on business in the field or related to the natural resources required to conduct social and environmental responsibility. Criminal penalties on any violations of CSR contained in Law No. 23 of 1997 on Environmental Management (UUPLH) of Article 41 paragraph (1) which states: "Whoever willfully unlawful acts that result in contamination and / or destruction of the environment, shall be punished by imprisonment of ten years and a maximum fine of five hundred million dollars ". Furthermore, Article 42 paragraph (1) states: "Whoever of negligence acts that resulted in contamination and / or destruction of the environment shall be punishable with imprisonment of three years and a maximum fine of one hundred million dollars" (Sutopoyudo, 2009). The discourse on CSR began in 2001 and raised more and more companies are expressing social activity despite lack of standards regarding disclosure. This was probably because the company does not have such support: standard reporting, skilled labor (and Islahuddin Rica, 2008).
Thinking underlying the Corporate Social Responsibility (Corporate Social Responsibility) is often considered the core of business ethics is that companies not only focus on economic obligations and legal (that is to the shareholders or shareholder), but also centered on the obligations of the parties other interested parties (stakeholders). Social responsibility of companies takes place between a company with all stakeholders, including the consumers, employees, communities, owners or investors, governments, suppliers and even competitors (Rika and Islahuddin, 2008).
The Begining Idea of CSR
CSR as an idea to make the company no longer faced with the responsibility centered on the single bottom line, the value of the company (corporate value) which is reflected in its financial condition (financial) only. But corporate responsibility must also be centered on the triple bottom line that is also concerned with social and environmental (Daniri, 2008 in Novita and Djakman, 2006). Because if only in terms of finance alone is not enough to guarantee a sustainable growth company value (sustainable).
In addition, companies can also gain legitimacy by demonstrating social responsibility through the disclosure of CSR in the media included in the annual report perusanaan (Oliver, 1991; Haniffa and Coke, 2005; Ani, 2007 in Novita and Djakman, 2006). It is the same also raised by Kiroyan (2006), in Novita and Djakman (2006) stated that by implementing CSR, it is hoped the company would gain social legitimacy and maximize long-term financial strength. This indicates that companies are implementing CSR would expect a positive response by market participants.
The Research of CSR
Cowen et al (1987) in Hackston & Milne (1999) in Rika and Islahuddin (2008) says that the consumer-oriented company is expected to provide information about social responsibility as this will enhance the company image and increase sales. Consistently implement CSR in the long run will foster a sense of community beterimaan to the presence of the company. These conditions which in turn can provide economic and business benefits to the companies concerned.
The company's survival can be seen from the judgment against the company. High value of the company can increase prosperity for our shareholders, so that the shareholders (investors) will mengiventasikan capital to the company (Tendi Haruman, 2008). Increase in firm value can be achieved if the management company with other parties including shareholders and stakeholders work together in making financial decisions aimed at maximizing working capital owned. If these measures can be run with a match, the problems that arise between the manager and another party is not likely to happen. But in fact the union between the two sides are often the problem occurs. According to Jensen and Meckling (1976), the concept of theory of the firm that the agency problem will lead to failure to achieve corporate financial objectives, namely to increase the value of the company by way of maximizing shareholder wealth.
Jensen and Meckling (1976) states that the cause of the conflict between managers with shareholders is a difference in making decisions related to fundraising activities (financing decision) and decision making related to how the proceeds are invested. Agency problems can occur because of the Asymmetric information between owners and managers, that is when one party has information that is not owned by another party.
Mondigliani and Miller in Yuniasih and Wirakusuma (2007) states that firm value is determined by the earnings power of the company's assets. Positive results indicate that the higher the earnings power and assets more efficiently perputarn or the higher the profit margin obtained by the company. Wahyudi and Pawestri (2006) states that the value of a company formed through the indicators of stock market value, greatly affecting the investment opportunities. Investment spending to give a positive signal about the company's growth in the foreseeable future, thus increasing the stock price as an indicator of corporate value (signaling theory). This is the underlying notion that there is a relationship between the researcher disclosure of corporate social responsibility (CSR) with the value of the company (firm value).
The Conclusion
This study is the development of research and Islahuddin Rica (2008) who studied the influence of corporate social responsibility towards the company's percentage of ownership by management as a moderating variable. In this study will examine again whether corporate social responsibility affect corporate value. While the management ownership variable as a moderating variable is not used as a moderating variable, but will be used as an independent variable. Researchers used a variable management ownership as an independent variable because the researchers wanted to know if there is influence between management ownership with the company.
