Introduction

The study of corporate social responsibility (CSR) and its relationship with firm's financial performance has been the hot topic in the academic world; however the interests of researchers have focused on investigating the phenomena of CSR more in the developed countries than in the developing world. Little study has been done in investigating the relationship between socially responsible restructuring and financial performance.

This study empirically explores the phenomena of CSR, enterprise restructuring and the relationship with firm’s performance in the context of economic reforms in China from the three important perspectives. The first investigates how Chinese managers perceive CSR, whether managers’ attitudes toward CSR influence the extent of managers’ socially responsible behaviours in restructuring. The study also examines relationship between socially responsible restructuring and financial performance in the listed firms. Finally the study ends up analyzing the case study of enterprise restructuring in China defence industry.

This chapter will analyze the phenomena of SOE restructuring and privatization over the past years in China, particularly the issues and problems arising from the restructuring, and the social impact of restructuring on the stakeholders. Against the background and context, the research questions are developed and justified.