One of the major challenges that managers face today in order to be competitive is the growing demand for corporate social responsibility. Most businesses compete on efficiency, price, or the level of quality or service as their competitive advantage. The purpose of this paper is to show that managers can think strategically and utilize corporate social responsibility (CSR) as a new source of competitive advantage to ensure long-term business competitiveness and success.
There are many aspects to CSR that managers can act on to gain a competitive advantage. The most common being philanthropic and environmental sustainability will be developed further in this paper. However there are several other aspects to CSR including a commitment to diversity, business ethics, legal, and economic. These components of CSR are necessary for companies to build a positive reputation and will help managers realize several benefits including better access to human and intellectual capital with diversity in the workplace, better access to financial capital and a corporate identity that others trust by building ethics into the corporate culture, and increased shareholder value and increased revenue by maximizing shareholder wealth with economic CSR. These benefits, as well as others such as strategic branding and operational efficiency can be achieved through philanthropic and environmental CSR.
Another form of philanthropic CSR that can yield a competitive advantage is cause related marketing. Cause related marketing is a form of marketing which partners a corporation with a non-profit for a mutual benefit relationship. There are several corporations and non-profits that have utilized cause related marketing such as Yoplait and Susan G. Komen, Mariott and March of Dimes, and of course the largest cause related marketing program Product Red with companies such as Motorola, Apple and the Gap. Environmental sustainability is the final major portion of CSR that managers can utilize to create a competitive advantage. Managers in business, government, and non-profit organizations need to understand how their business affects the environment and how to balance the needs of maximizing profit with those of the environment.
In conclusion, the term corporate social responsibility involves many aspects of business and is defined different ways by different people. Simply, it’s how a business decides to do what they think is right. It may be what’s right for society, by having a diverse workforce that allows their business to capitalize on the potential human and intellectual capital that’s available. It may be what the business feels is ethically and legally right. They may express their decisions in a code of conduct that all employees are expected to work by. When many hear the term ‘corporate social responsibility’ they immediately think of companies donating large amounts of their profits to various philanthropies, a way of sharing the wealth. While this may be true in some cases, businesses don’t need to just donate large sums at random. In fact, they can donate to their advantage by effectively marketing their donations, choosing a few causes to get more involved in, or sharing in the profits through cause-related marketing. A growing trend for businesses today is becoming environmentally sustainable as a form of doing the right thing.
