explore how corporate social responsibility (CSR) can be effectively built into firm strategy.

Building corporate social responsibility into strategy
Jeremy Galbreath Graduate School of Business, Curtin University of Technology, Perth, Australia

Abstract

Purpose – This paper seeks to explore how corporate social responsibility (CSR) can be effectively built into firm strategy.

Design/methodology/approach – By drawing upon classic work in the field, the paper first offers conceptual discussion and then systematically develops a means of incorporating CSR into strategy. Findings – Common approaches to CSR, such as PR campaigns, codes of ethics and triple bottom line reports are far too removed from strategy. To counter common and generally non-strategic approaches, a framework is offered which demonstrates that CSR can be linked integrally with strategy, and highlights an approach to consider CSR across six dimensions of firm strategy. Practical implications – Firms do not have to respond reactively towards CSR nor do they have to struggle with understanding the strategic implications of CSR. The paper demonstrates that examining CSR in the context of firm strategy is both possible and increasingly necessary to developing competitive advantage in the current environment. Originality/value – The value of the paper rests in the treatment of CSR as an issue that is strategic, rather than one that is problematic or potentially a threat. By doing so, firms are offered a means to take a much more proactive approach to CSR than previously discussed. Keywords Corporate social responsibility, Corporate strategy Paper type Conceptual paper Introduction For decades, corporate social responsibility (CSR) has been a subject of intense debate among scholars and practitioners (Carroll, 1999; Pearce and Doh, 2005). Discussions have generally focused on the role of business in society and the nature of a firm’s social responsibilities. More recent treatments have progressed towards theory development as well as empirical tests of the relationship between CSR and firm performance (Orlitzky et al., 2003; Aguilera et al., 2007). However, at the practical level, there appears to remain much confusion with respect to how to build or integrate CSR into the overall strategy of the firm. By way of example, while CEOs acknowledge that addressing societal expectations is an important consideration for competitive success, they appear to be struggling with just how to build CSR into corporate strategy (Hirschland, 2005; McKinsey and Company, 2006). Indeed, recent reports reveal that almost six out of ten organizations have no strategy for CSR while many companies are unclear as to how to adequately anticipate which social issues will affect their overall strategy (The Work Foundation, 2002; McKinsey and Company, 2006). Where efforts are made with respect to CSR strategies, typical approaches appear to be weak in that they fail to capture the fundamental purposes of strategy. The current issue and full text archive of this journal is available at www.emeraldinsight.com/0955-534X.htm Building CSR into strategy 109 Received May 2008 Revised June 2008 Accepted June 2008 European Business Review Vol. 21 No. 2, 2009 pp. 109-127 q Emerald Group Publishing Limited 0955-534X DOI 10.1108/09555340910940123 Typical approaches to CSR include developing corporate codes of ethics, preparing triple bottom line reports and launching public relations campaigns that highlight a given socially responsible “act” (Vyakarnam, 1992; Weaver et al., 1999). According to worldwide director of management consulting firm McKinsey and Company, Ian Davis, such approaches are too limited, too defensive and are too disconnected from strategy (Davis, 2005). In the first instance, a code of ethics mainly addresses personal behavior, not strategy (Hosmer, 1994). With respect to triple bottom line reporting efforts are focused mainly on information transparency rather than on corporate strategy (Vyakarnam, 1992; Weaver et al., 1999). Lastly, public relations campaigns that contain CSR content have been labeled as a non-strategic corporate “window dressing” exercise (Weaver et al., 1999). How then, might CSR be built into strategy and how might this lead to a better performing, more competitive and responsible firm? In order to examine an important, but rarely holistically explored topic in the stream, the remainder of this paper will discuss a means for addressing the CSR-strategy gap. To do so, background on strategy is offered first, which sets the stage for its use in this paper. Next, the concept of social issues and some basic discrepancies between this concept and strategy is described, which is important to the development of the CSR-strategy discussion. CSR is then framed within the context of the six fundamental dimensions of strategy.