**1. Introduction**

Ever since market economy becomes the dominant economic structure, maximizing share‐ holder wealth or corporate value has been the major corporate goal for management. The goal of value maximization describes that in the world of no agency cost, management would make the best corporate decisions in an attempt to maximize shareholder's wealth or corporate value. In the presence of managerial agency cost occurring to a firm, the goal of value maxi‐ mization is compromised by agency cost due to management's self‐interest [1]. Nevertheless, value maximization continues to serve as the top‐priority corporate goal in the prominent economic system of market economy. Take, for example, the JX Group, the parent company of the largest petroleum firm in Japan, ENEOS. In their 2013 Annual Report, organizational restructure was explicitly strategized to aim at maximizing the corporate value of their group, which was described as the ultimate corporate goal.

© 2016 The Author(s). Licensee InTech. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. © 2017 The Author(s). Licensee InTech. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

When the corporate goal of value maximization is formulated into a publicly listed firm, the goal is often extended to maximize stock price. Both corporate goals prevail over the other views of business philosophy in the current dominant market economy. More frequently, value maximization is referred to as the core concept of "shareholder capitalism." In the classic principal‐agent relationship between shareholders and management, shareholder capitalism protects the shareholder's interest toward the firm, which is not explicitly described in the business contracts when dealing with management.

Although value maximization has been the major objective function of management for a long time, contrast to shareholder capitalism, the perspective of "stakeholder capitalism" has also gained significant votes of advocacy. The inception of this perspective can be traced back to Henry Ford's time, in which he said, "there is one rule for the industrialist and that is: make the best quality of goods possible at the lowest cost possible, paying the highest wages possible." Clearly, the stakeholders that Henry Ford was referring to were employees of a firm. According to Freeman [2], in the contemporary business world, stakeholders are spread out to "any group or individual who can affect or is affected by the achievement of the organization's objectives."

In recent years, a related concept to stakeholder capitalism, corporate social responsibility (CSR), has been of great interest not only to financial economists, but also to corporate prac‐ titioners. Although CSR has quite a variety of definitions,<sup>1</sup> the consensus is that corporate behavior can no longer be examined from the single dimension of value maximization. A firm is expected to take more responsibilities to the economy as well as to the society. That being said, corporate goals should be extended from enhancing corporate growth in value maximization to developing social growth. Carroll [4] proposes a pyramid model to describe these responsibilities, that is, economic, legal, social, and philanthropic, from bot‐ tom to top.

The infusion of CSR into corporate goal has become the new element to examine the perfor‐ mance of a modern business, yet the debate over CSR is still ongoing even recently. Take, for example, Milton Friedman's famous argument. Friedman [5] argues that in a free economy, there is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game. Apparently, Friedman defines that the goal for a firm is to fulfill its economic and legal responsibilities. By contrast, Carroll [4] proposes a pyramid model that management should aim to meet four levels of corporate social responsibilities, i.e., economic, legal, ethical, and philanthropic responsibilities. This model is clearly a more far‐reaching extension than Friedman's argument. Based on the agency theory, Jensen [6] contends that management's self‐interest cannot guarantee value maximization since corporate value will be offset by management's agency cost should proper incentives not be provided. Hence, value maximi‐ zation is still the major driving force in a market economy given that stakeholder's interest is taken into account and that the trade‐offs to compensate these interest are made on the condition that management is provided proper incentives. Recently, Porter and Kramer [7]

<sup>1</sup> According to Carroll [3], there are over 25 different ways to define CSR in the literature.

have proposed that a firm should make every effort to create shared value by taking the interest of all the stakeholders into account. Thus, CSR should be considered an important corporate strategy.

Along the line of CSR research, this chapter intends to take one more step by arguing that management's CSR mindsets can serve as a driving force for corporate growth. Thus, CSR is no longer a by‐product, in addition to the fundamental legal and economic responsibilities of a firm, instead CSR becomes one of the key corporate growth strategies. In the rest of the chapter, we discuss CSR theories and dimensions, elaborate on approaches to CSR measure‐ ment, present evidence for the relationship between CSR and firm performance, and finally elucidate why CSR should be viewed as one of the key corporate growth strategies.
