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Journal of Business Ethics (2009) 87:5769 Springer 2008 DOI 10.1007/s10551-008-9812-2
Exploring the Nature of the Relationship Between CSR and Competitiveness
Marc Vilanova Josep Maria Lozano
Daniel Arenas
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.
KEY WORDS: competitiveness, responsible competitiveness, corporate reputation, corporate social responsibility, organizational strategy, paradox
Introduction
Corporate social responsibility (hereinafter CSR) has become one of the central issues on the agenda of organizations today, but is still a long way from being a centre stage on corporate strategy (Smith, 2003; Stewart, 2006). One of the key problems is the lack of understanding about the impact CSR has on competitiveness (Porter and Kramer, 2006). There are many studies trying to analyze the relationship between CSR and nancial performance (Chand and Fraser, 2006; McWilliams and Siegel, 2001), proposing a business case for CSR (Cramer et al., 2006; Smith, 2003) or providing case studies on
Marc Vilanova is currently researcher at the Institute for Social Innovation, ESADE Business School (URL), responsible for the Ethos CSR and Competitiveness project. He specializes in the issues of responsible competitiveness, responsible strategy, corporate social responsibility, organizational sustainability and accountability. He is also lecturer at the Social...