Research On The Impact Of Huahai Pharmaceutical’s Fulfillment Of Social Responsibility On Financial Performance

In the late 1980s,the theory of corporate social responsibility began to rise in China.In 2011,the national standard of corporate social responsibility was formulated.and the corporate social responsibility system was gradually established in China.In today’s society,the speed of information transmission is increasing.the transparency is increasing,and the reputation effect of enterprises is becoming more and more prominent.Therefore,enterprises must pay more attention to the performance of social responsibility to maintain their reputation.As a leading enterprise of raw materials with Chinese characteristics,Huahai Pharmaceutical plays the role of the largest supplier of sartan drugs in the world.However,in 2018,the company’s products were revealed to contain the genotoxic impurity NDMA,which caused a public outcry.The "Toxin Gate " incident has had a bad impact on the reputation and financial performance of Huahai Pharmaceutical.but the competition in the pharmaceutical manufacturing industry in which Huahai Pharmaceutical is located has become increasingly fierce.For the long-term development of the company,the company must actively fulfill its social responsibility to repair the corporate reputation to improve financial performance,so that the company can obtain long-term competitiveness.Based on this,this paper selects Huahai Pharmaceutical as the research object.Firstly,this paper summarizes the relevant literature research and theoretical basis,establishes the mechanism of "social responsibility performance-reputation repair-financial performance improvement",and puts forward the reputation repair path of "social responsibility display to save short-term reputation,social responsibility expansion to rebuild long-term reputation ",which provides a theoretical basis for the case study of this paper.Secondly,this paper analyzes Huahai Pharmaceutical and its industry environment,points out the reasons for the case selection,and further analyzes the impact of the " Toxingate " incident on Huahai Pharmaceutical.It is found that the path of this reputation damage is mainly media coverage.consumers’ loss of confidence in products,and regulatory authorities’ bans.Secondly,from the perspective of reputation repair,this paper analyzes the specific measures taken by Huahai Pharmaceutical to fulfill its social responsibility,and finds that the management of Huahai Pharmaceutical saves short-term reputation through a series of social responsibility display behaviors,and implements social responsibility expansion behaviors by assuming responsibility for consumers,suppliers,shareholders,employees,social welfare and environmental protection,thus realizing the reconstruction of long-term reputation.Thirdly,the social contribution value per share is used to evaluate the performance of Huahai Pharmaceutical’s social responsibility.The reputation evaluation index system and financial performance index evaluation system are established and comprehensively evaluated by factor analysis.The corresponding reputation comprehensive score and financial performance comprehensive score are obtained.At the same time,the social contribution value per share.reputation score and financial performance score are compared and analyzed.Finally,it is concluded that fulfilling social responsibility can repair reputation,improve financial performance and enhance the core competitiveness of enterprises.Through this case study,this paper finds that when companies are exposed to negative events,corporate reputation is vulnerable,but internal and external pressures will promote companies to actively fulfill their social responsibilities to restore corporate reputation.Good reputation is a specific resource,which will improve the core competitiveness of enterprises and contribute to the improvement of financial performance.The purpose of this paper is to provide a win-win model for other enterprises,which can meet the needs of stakeholders while pursuing economic benefits.