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Strategic Outcomes in Voluntary CSR: Reporting Economic and Reputational Benefits in Principles-Based Initiatives

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Abstract

Although existing research evaluates the growth and motivations behind global corporate social responsibility (CSR) activity, there is little understanding whether these growing commitments generate strategic benefits to their adherents. In this article, we analyze the organizational attributes that underlie the firm’s ability to generate competitive advantage from the adoption of a global CSR framework. We develop hypotheses on economic and reputational benefits and test whether firm performance, organizational resources, and access to business and CSR networks determine these benefits in CSR frameworks. Results from a survey of 213 Spanish global compact business participants strongly support our arguments.

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Notes

  1. Early efforts to institutionalize such norms came as early as the 1970s and were predominantly steered by the United Nations (UN). These efforts were largely influenced by intergovernmental organizations (IGOs) and have been reported as remaining largely symbolic since inception due in large part to corporations and some developed countries’ governments lobbying aggressively against such international law (Hedley 1999; Sagafi-Nejad 2008). A second wind to these CSR efforts came to life after society became more sensitive toward environmental and human rights and as growing normative pressures were being imposed on state and non-state actors to address these issues (Mayer and Gereffi 2010; Waddock 2009).

  2. From its inception, the GC has received positive judgments as well as criticism and skepticism. It is beyond the scope of this study to offer a review of these, as much work has already been done in this area. For continued support of the initiative see for example: (Fussler 2004; Hancock 2006; Hamann 2007). For NGO criticism see: (Hemphill 2005; Hughes et al. 2001; Ruggie 2001). For a comprehensive review of the GC’s decade achievements see: Rasche and Kell (2010).

  3. There are other process-oriented initiatives with stricter member requirements i.e., World Business Council for Sustainable Development (WBCSD), and the International Standardisation Organisation (ISO), which require more extensive contributions and commitments, including top management involvement (Gjølberg 2009). To be invited as a member of WBCSD, companies must demonstrate best-in-class performance, however; the initiative remains process oriented in terms of activities and working methods. ISO 14000 on the other hand is a demanding certification involving audits and third-party verification, and the certificate guarantees only that the company has management procedures in place.

  4. This sample is based on 2010 survey data as the year marked the 10th year anniversary for the GC. The GC was incepted in July 2000 giving us the opportunity to gage CSR activity for our sample since then.

  5. Out of 213 firms, 37 responses were completed by top-level managers (CEO, president, vice-president, etc.), followed by 34 responses by middle-level managers (Director, branch managers, team leader, etc.), 58 responses by first-level managers with lead CSR duties (Lead CSR person), 23 responses by non-managers with CSR duties (CSR operative, CSR specialist), and 1 non-managerial response from a secretarial position.

  6. MERCO, the Corporate Reputation Monitor, assesses the reputation of companies operating in Spain, and is one of the benchmark business monitors in the world. Each year more than 700 companies enter to be reviewed, and only 100 make the ranking. The ranking is based on the six main areas of each company: economic profitability, quality of service and customer satisfaction, innovation, social and environmental responsibility policies, internal reputation and job quality, and an international dimension. Merco 2012 includes the independent Review Report (ISA E3000), which is carried out by KPMG and has become the foremost reputation monitor in the world. Moreover, all of Merco’s methodology and weighting criteria are public record.

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  1. Department of Marketing and Management Sciences, William Paterson University, 1600 Valley Road, Room 3071, Wayne, NJ, 07474, USA

    Jorge A. Arevalo

  2. School of Business, City University of New York - College of Staten Island, 3N-228, 2800 Victory Boulevard, Staten Island, NY, 10314, USA

    Deepa Aravind

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Arevalo, J.A., Aravind, D. Strategic Outcomes in Voluntary CSR: Reporting Economic and Reputational Benefits in Principles-Based Initiatives. J Bus Ethics 144, 201–217 (2017). https://doi.org/10.1007/s10551-015-2860-5

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