Skip to main content
SpringerLink
Log in

Exploring the Nature of the Relationship Between CSR and Competitiveness

  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

This paper explores the nature of the relationship between corporate social responsibility (CSR) and competitiveness. We start with the commonly held view that firm competitiveness is defined by the market. That is, the question of what are the critical competitiveness factors is answered by looking at how companies and financial analysts describe and evaluate a firm. To analyze this, we review the current state of the art on the relationship between CSR and competitiveness. Second, CSR criteria used by financial analysts is identified and compared with company valuation methods. Third, the results of a multi-stakeholder dialogue on CSR and competitiveness of the European financial sector are presented. As a conclusion, we argue that CSR and competitiveness relate through a learning and innovation cycle, where corporate values, policies and practices are permanently defined and re-defined. Thus, we propose that learning takes place as CSR is embedded in business processes, and that once it has been integrated, in turn, it generates innovative practices, and finally, competitiveness. At the end of the paper, we propose that CSR in practice consists of managing inherent paradoxes generated by the tension between CSR and business policies.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Ambastha A., Momaya K. 2004. Competitiveness of Firms: Review of Theory, Frameworks and Models. Singapore Management Review 26(1): 45–61

    Google Scholar 

  • Aram J.: 1989, The Paradox of Interdependence Relations in the Field of Social Issues in Management. Academy of Management Review 14(2), 266–283

    Article  Google Scholar 

  • Ayuso S., Rodriguez M. A., Ricart J. E. 2006. Responsible Competitiveness at the “Micro” Level of the Firm Using Stakeholder Dialogue as a Source for New Ideas: a Dynamic Capability Underlying Sustainable Innovation. Corporate Governance 6(4): 475–490

    Google Scholar 

  • Bansal P., Roth K. 2000. Why Companies Go Green: A Model of Ecological Responsiveness. Academy of Management Journal 43(4): 717–736

    Article  Google Scholar 

  • Barney J. 1991. Firm Resources and Sustained Competitive Advantage. Journal of Management 17(1): 99–120

    Article  Google Scholar 

  • Brealey R. A., Myers S. C. 2000. Principles of Corporate Finance. 6th Edition. New York. McGraw-Hill

    Google Scholar 

  • Budd L., Hirmis A. K. 2004. Conceptual Framework for Regional Competitiveness. Regional Studies 38(9): 1015–1028

    Article  Google Scholar 

  • Business Week: 2007, Special Report, The 100 Top Brands, August 6. Businessweek.com. http://www.businessweek.com/pdfs/2007/0732_globalbrands.pdf

  • Business Week: 2007, Special Report, The World’s Most Innovative Companies, May 4, 2007. Businessweek.com. http://www.businessweek.com/innovate/content/may2007/id20070504_051674.htm

  • Business and Human Rights Resource Centre: 2007, `Business and Human Rights: Mapping International Standards of Responsibility and Accountability for Corporate Acts. www.business-humanrights.org

  • Calton J., S. Payen: 2003, Coping with Paradox. Business in Society 42(1), 7–42

    Article  Google Scholar 

  • Cameron K. S. 1986, Effectiveness as Paradox: Consensus and Conflict in Conceptions of Organizational Effectiveness. Management Science 32(5), 539–553

    Article  Google Scholar 

  • Carlisle Y. M., Faulkner D. O. 2005. The Strategy of Reputation. Strategic Change 14(8): 413–422

    Article  Google Scholar 

  • Carroll A. B. 1979. A Three-Dimensional Conceptual Model of Corporate Performance. Academy of Management Review 4(4): 497–505

    Article  Google Scholar 

  • Carroll A. B. 1999. Corporate Social Responsibility. Business and Society 38(3): 268–295

    Article  Google Scholar 

  • Carter A., Simkins B., Simpson W. 2003. Corporate Governance, Board Diversity, and Firm Value. The Financial Review 38: 33–53

    Article  Google Scholar 

  • Chand M., Fraser S. 2006. The Relationship Between Corporate Social Performance and Corporate Financial Performance: Industry Type as a Boundary Condition. The Business Review, Cambridge 5(1): 240–245

    Google Scholar 

  • Clegg S., J. Vieira da Cunha, M. Pina: 2002, Management Paradoxes: A Relational View. Human Relations 55(5), 483–503

    Article  Google Scholar 

  • Collins C. J., Porras I. J. 1996. Building Your Company’s Vision. Harvard Business Review 74(5): 65–77

    Google Scholar 

  • Copeland T. E., Koller T., Murrin J. 2000. Valuation: Measuring and Managing the Value of Companies. 3rd Edition. New York. Wiley

    Google Scholar 

  • Cramer J., Van Der Hiejden A., Jonker J. 2006. Corporate Social Responsibility: Making Sense Through Thinking and Acting. Business Ethics 15(4): 380–389

    Article  Google Scholar 

  • D’Cruz J., Rugman A. 1992. New Concepts for Canadian Competitiveness. Kodak, Canada

    Google Scholar 

  • Donaldson T., Dunfee T. W. 2002. Ties that Bind in Business Ethics: Social Contracts and Why they Matter. Journal of Banking & Finance 26(9): 1853–1865

    Article  Google Scholar 

  • Donaldson T., Preston L. E. 1995. The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications. Academy of Management Review 20:65–91

    Article  Google Scholar 

  • Draper S. 2006. Corporate Responsibility and Competitiveness at the Meso Level: Key Models for Delivering Sector-Level Corporate Responsibility. Corporate Governance 6(4): 409–419

    Google Scholar 

  • Elkington, J.: 1998, Cannibals with Forks: The Triple Bottom Line of 21st Century Business (New Society Publishers)

  • Epstein E. M. 1987. The Corporate Social Responsibility Process: Beyond Business Ethics, Corporate Social Reponsibility, and Corporate Social Responsiveness. California Management Review 29(3): 99–114

    Google Scholar 

  • European Commission (EC): 2002, Green Book: Promoting a European Framework for Corporate Social Responsibility. http://europa.eu.int/comm/employment_social/soc-dial/csr/greenpaper.htm

  • Fan Y. 2005. Ethical Branding and Corporate Reputation. Corporate Communications 10(4): 341–350

    Article  Google Scholar 

  • Fernandez, P.: 2002, Company Valuation Methods: The Most Common Errors in Valuations. Working Paper No 449. IESE

  • Forbes: 2007, Special Report, The Global 2000, March 29. Forbes.com. http://www.forbes.com/lists/2007/18/biz_07forbes2000_The-Global-2000_Rank.html

  • Fortune: 2007, November 12. Fortune.com. http://money.cnn.com/magazines/fortune/global500/2007/accountability/full_list.html

  • Freeman R. E. 1984. Strategic Management: A Stakeholder Approach. Boston: Pitman Publishing

    Google Scholar 

  • Freeman R. E. 1999. Divergent Stakeholder Theory. Academy of Management Review 24(2): 233–236

    Article  Google Scholar 

  • Freeman R. E., Evan W. M. 1990. Corporate Governance: A Stakeholder Interpretation. Journal of Behavioural Economics 19(4): 337–359

    Article  Google Scholar 

  • Frooman J. 1999. Stakeholder Influence Strategies. Academy of Management Review 24(2): 191–205

    Article  Google Scholar 

  • Goodpaster K. E. 1983. The Concept of Corporate Social Responsibility. Journal of Business Ethics 2: 1–22

    Article  Google Scholar 

  • Goodpaster K. E. 1991. Business Ethics and Stakeholder Analysis. Business Ethics Quarterly 1(1):53–72

    Article  Google Scholar 

  • Goss, T., R. Pascale, and A. Athos: 1993, ‹The Invention Roller Coaster: Risking the Present for a Powerful Future’, Harvard Business Review 76(6), 97–108

  • Grant R. M. 2000. Contemporary Strategy Analysis, 3rd Edition. Massachusetts. Blackwell Publishers

    Google Scholar 

  • Gray, D. and P. Clarke: 2005, `Meeting Goodpaster's Challenge: A Smithian Approach to Goodpaster’s Paradox', Business Ethics: A European Review (14), 119–126

  • Great Place to Work. www.greatplacetowork.com

  • Grey B. 1996. Cross-Sectoral Partners: Collaborative Alliances Among Business, Government and Communities. Huxham, Chris. Creating Collaborative Advantage. London: Sage Publications

    Google Scholar 

  • GRI.: 2002, Global Reporting Initiative Sustainability Reporting Guidelines. www.globalreporting.org/GRIGuidelines/2002draft.htm

  • Griffin J., J. Mahon: 1997. The Corporate Social Performance and Corporate Financial Performance Debate: Twenty Five Years of Incomparable Research. Journal of Business and Society 36(1), 5–31

    Article  Google Scholar 

  • Gueterbok R. 2004. Greenpeace Campaign Case Study – StopEsso. Journal of Consumer Behaviour 3(3): 265–271

    Article  Google Scholar 

  • Haigh M., Jones M. T. 2006. The Divers of Corporate Social Responsibility: A Critical Review. The Business Review, Cambridge 5(2): 245–251

    Google Scholar 

  • Hamel G., Prahalad C. K. 1989. Strategic Intent. Harvard Business Review 3: 63–76

    Google Scholar 

  • Handy, C.: 1994, The Age of Paradox (Harvard Business School Press)

  • Handy C. 2002. What’s a Business for. Harvard Business Review 80(12): 49–60

    Google Scholar 

  • Harrison J. S., Freeman R. E. 1999. Stakeholders, Social Responsibility and Performance: Empirical Evidence and Theoretical Perspectives. Academy of Management Journal. 42(9): 479

    Article  Google Scholar 

  • Hess D., Rogovsky N., Dunfee T. W. 2002. The Next Wave of Corporate Community Involvement: Corporate Social Initiatives. California Management Review 44(2): 110–125

    Google Scholar 

  • Humble J., Jackson D., Thomson A. 1994. The Strategic Power of Corporate Values. Long Range Planning 27(6): 28–43

    Article  Google Scholar 

  • IMD: 2006, World Competitiveness Yearbook. http://www.imd.ch/research/centers/wcc/world_competitiveness_yearbook.cfm?bhcp=1

  • International Finance Corporation: 2003. www.ifc.org/equatorprinciples

  • International Labor Organization. Fundamental Principles and Rights to Work. http://www.ilo.org/dyn/declaris/DECLARATIONWEB.INDEXPAGE

  • Jones T. M. 1980. Corporate Social Responsibility Revisited, Redefined. California Management Review 22(3): 59–67

    Google Scholar 

  • Jones T. M. 1995. Instrumental Stakeholder Theory. The Academy of Management Review 20(2): 404–437

    Article  Google Scholar 

  • Jones T. M., Wicks A. C. 1999. Convergent Stakeholder Theory. The Academy of Management Review 24(2): 206–221

    Article  Google Scholar 

  • Joyner B. E., Payne D. 2002. Evolution and Implementation: A Study of Values, Business Ethics and Corporate Social Responsibility. Journal of Business Ethics 41: 297–311

    Article  Google Scholar 

  • Juholin E. 2004. For Business or the Good of All? A Finnish Approach to Corporate Social Responsibility. Corporate Governance 4(3): 20–31

    Article  Google Scholar 

  • Kay J. 1993. Foundations of Corporate Success. Oxford. Oxford University Press

    Google Scholar 

  • Korhonen J.: 2006, On the paradox of Corporate Social Responsibility: How Can We Use Social Science and Natural Science for a New Vision? Business Ethics: A European Review 15(2), 200–214

    Google Scholar 

  • Lewis M. W. 2000. Exploring Paradox: Toward a More Comprehensive Guide. Academy of Management Review 25(4): 760–775

    Article  Google Scholar 

  • Lowell, B. L.: 2007, ‹The New Metrics of Corporate Performance: Profit Per Employee’, The McKinsey Quarterly 1, 56–65. www.mckinseyquarterly.com

  • Lozano J. M. 2002. Towards the Relational Corporation: From Managing Stakeholder Relations to Building Stakeholder Relationships (Waiting for Copernicus). Corporate Governance 5(2): 60–77

    Article  Google Scholar 

  • Mackey A., Mackey T. B., Barney J. B. 2007. Corporate Social Responsibility and Firm Performance: Investor Preferences and Corporate Strategies. Academy of Management Review 32(3): 817–835

    Article  Google Scholar 

  • McWilliams A., Siegel D. 2001 Corporate Social Responsibility: A Theory of the Firm Perspective. Academy of Management Review 26(1): 117–128

    Article  Google Scholar 

  • Mintzberg H. 1987. Crafting Strategy. Harvard Business Review 65(4): 66–75

    Google Scholar 

  • Mintzber H. 1993. The Rise and Fall of Strategic Planning. New York: Free Press

    Google Scholar 

  • Murths T. P., Lenway S. A. 1998. Country Capabilities and the Strategic State: How National Political Institutions Affect MNC Strategies. Strategic Management Journal 15(5): 113–119

    Google Scholar 

  • Organization for Economic Co-operation and Development (OECD): (2000), Revised OECD Guidelines for␣Multinational Enterprises. www.oecd.org/EN/document/0,,EN-document-93-nodirectorate-no-6-18925-28,00.html

  • Organization for Economic Co-operation and Development (OECD): (2001), Corporate Social Responsibility, Partners for Progress

  • Orlitzky M. 2001. Does Firm Size Confound the Relationship Between Corporate Social Performance and Business Performance? Journal of Business Ethics 33(2):167–180

    Article  Google Scholar 

  • Ospina, S. and A. Saz-Carranza: 2005, ‹Paradox and Collaboration in Coalition Work’, Academy of Management Annual Meeting

  • Pava M., J. Krausz: 1996, The Associaciation Between Corporate Social-Responsibility and Financial Performance: The Paradox of Social Cost. Journal of Business Ethics 15(3), 321–357

    Article  Google Scholar 

  • Pettigrew, A. M.: 1985, ‹Contextualist Research: A Natural Way to Link Theory and Practice’, in E. E. Lawler (ed.), Doing Research that is Useful in Theory and Practice (Jossey Bass, San Francisco, CA)

  • Pettigrew, A.: 1990, ‹Contextualist Research and the Study of Organizational Change Processes’, in E.␣Hirschheim, R. Fitzgerald, G. Wood-Harper and T. Mumford (eds.), Research Methods in Information Systems (Elsevier Science Publishers, North Holland)

  • Poole M. S., Van De Ven A. H. 1989. Using a Paradox to Build Management and Organization Theories. The Academy of Management Review 14(4): 562–578

    Article  Google Scholar 

  • Porter M. E. 1980. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press

    Google Scholar 

  • Porter M. E. 1985. Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press

    Google Scholar 

  • Porter M. E. 1998. Clusters and the New Economics of Competition. Harvard Business Review 76(6): 77–90

    Google Scholar 

  • Porter M. E., Kramer M. R. 2006. Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review 84(12): 78–92

    Google Scholar 

  • Porter M. E., Van Der Linde C. 1995. Green and Competitive: Ending the Stalemate. Harvard Business Review 73(5): 120–134

    Google Scholar 

  • Prahalad C. K., Hammond A. 2002. Serving the World’s Poor, Profitably. Harvard Business Review 80(9): 48–57

    Google Scholar 

  • Principles for Responsible Investment. www.unpri.org

  • Pruzan P. 2001 The Question of Organizational Consciousness: Can Organizations have Values, Virtues and Visions?. Journal of Business Ethics 29(3), 271–284

    Article  Google Scholar 

  • Pruzan P., Thyssen O. 1990. Conflict and Consensus: Ethics as a Shared Value Horizon for Strategic Planning. Human Systems Management 9, 135–151

    Google Scholar 

  • Reputation Institute: 2005, Corporate Ranking. http://www.causemarketingforum.com/page.asp?ID=422

  • Robertson, D. C., Nicholson N. 1996. Expressions of Corporate Social Responsibility in U.K. Firms. Journal of Business Ethics 15(10), 1095–1106

    Article  Google Scholar 

  • Robin D. P., Reidenbach R. E. 1988. Integrating Social Responsibility and Ethics into the Strategic Planning Process. Business and Professional Ethics Journal 7(3–4), 29–46

    Google Scholar 

  • Saz-Carranza, A.: 2007, Managing Interorganizational Networks: Leadership, Paradox, and Power. Doctoral Thesis Dissertation, ESADE Business School, Barcelona

  • Schnietz, K. E., Epstein M. J. (2005). Exploring the Financial Value of Reputation for Corporate Responsibility During a Crisis. Corporate Reputation Review 7(4), 327–345

    Article  Google Scholar 

  • Sethi S. P. 1975. Dimensions of Corporate Social Responsibility. California Management Review 17(3), 58–64

    Google Scholar 

  • Sison A. J. G. (2000). The Cultural Dimension of Codes of Corporate Governance: A Focus on the Olivencia Report. Journal of Business Ethics 27, 181–192

    Article  Google Scholar 

  • Smith N. C. 2003. Corporate Social Responsibility: Whether or How?. California Management Review 45(4), 52–76

    Google Scholar 

  • Solomon R. C. 1993. Ethics and Excellence. Cooperation and Integrity in Business. Oxford: Oxford University Press

    Google Scholar 

  • Stansbury J., B. Barry: 2007, Ethics Programs and the Paradox of Control. Business Ethics Quarterly 17(2), 239–261

    Google Scholar 

  • Stewart T. A. 2006. Corporate Social Responsibility: Getting the Logic Right. Harvard Business Review 84(12), 14–14

    Google Scholar 

  • Sum N., Ngai P. 2005 Globalization and Paradoxes of Ethical Transnational Production: Code of Conduct in Chinese Workplace. Competition & Change 9(2), 181–200

    Article  Google Scholar 

  • Swanson D. L. 1995. Addressing a Theoretical Problem by Reorienting the Corporate Social Performance Model. Academy of Management Review 20, 43–64

    Article  Google Scholar 

  • Turcotte, M. and J. Pasquero: 2001, `The Paradox of Multistakeholder Collaborative Roundtables', The Journal of Applied Behavioral Science 37(4), 447–464

    Google Scholar 

  • United Nations: 2000, Global Compact. http://www.unglobalcompact.org

  • United Nations Environmental Protection Agency Finance Initiative (UNEPFI): 2005, http://www.unepfi.org/work_streams/investment/principles/

  • Valor C. 2005. Corporate Social Responsibility and Corporate Citizenship: Towards Corporate Accountability. Business and Society Review 110(2), 191–213

    Article  Google Scholar 

  • Van de Ven B., Jeurissen R. 2005. Competing Responsibly. Business Ethics Quarterly 15(2), 299–317

    Google Scholar 

  • Waddock S. 2000. The Multiple Bottom Lines of Corporate Citizenship: Social Investing, Reputation, and Responsibility Audits. Business & Society Review 105(3), 323–346

    Article  Google Scholar 

  • Whetten, D. A., G. Rands and P. Godfrey: 2001, ‹What are the Responsibilities of Business in Society?’ in A.␣Pettigrew, H. Thomas and R. Whittington (eds.), Handbook of Strategy and Management (Sage, London)

  • Windsor, D.: 2001, ‹The Future of Corporate Social Responsibility’, The International Journal of Organizational Analysis 9(3), 225–256

  • World Economic Forum: 2007, Global Competitiveness Report, http://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htm

  • Zadek S. 2001. The Civil Corporation: the New Economy of Corporate Citizenship. London: Earthscan

    Google Scholar 

  • Zadek S. 2006. Responsible Competitiveness: Reshaping Global Markets Through Responsible Business. Corporate Governance: The International Journal of Effective Board Performance 6(4), 334–348

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Institute for Social Innovation, ESADE Business School, Av. de Pedralbes, 60-62, 08034, Barcelona, Spain

    Marc Vilanova, Josep Maria Lozano & Daniel Arenas

Authors
  1. Marc Vilanova
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Josep Maria Lozano
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Daniel Arenas
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Marc Vilanova.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Vilanova, M., Lozano, J.M. & Arenas, D. Exploring the Nature of the Relationship Between CSR and Competitiveness. J Bus Ethics 87 (Suppl 1), 57–69 (2009). https://doi.org/10.1007/s10551-008-9812-2

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-008-9812-2

Keywords

Search

Navigation