STRATEGIC CSR, PRODUCTION PERFORMANCE, AND BUSINESS EFFICIENCY IN SUGAR FACTORIES

Abstract

Nowadays, Corporate Social Responsibility (CSR) is considered as part of companies’ business strategy, and not a companies’ obligation per se. The Corporation Act No. 40/2007 and the Law No. 19/2003 concering State-Owned Enterprise require companies to have CSR program, especially those companies related to natural resources. This study is a qualitative study which aim to analyze the production performance, business efficiency, and corporate social responsibility of sugar factories located in ex Karesidenan Besuki, East Java, Indonesia, based on strategic CSR concept. There are four sugar factories analyzed in this study. The results of the study show that the production tends to increase during the period of 2009 to 2014, both for sugar production also for molasses. The CSR program of the sugar factories is embedded in the Partnership Program and Community Development program. The partnership program can be considered as strategic CSR, while community development program is more on philanthropy or nonstrategic CSR.