Competing Responsibly

Abstract

Abstract:In this paper we examine the effects of different competitive conditions on the determination and evaluation of strategies of corporate social responsibility (CSR). Although the mainstream of current thinking in business ethics recognizes that a firm should invest in social responsibility, the normative theory on how specific competitive conditions affect a firm’s social responsibility remains underdeveloped. Intensity of competition, risks to reputation and the regulatory environment determine the competitive conditions of a firm. Our central thesis is that differential strength of competition produces differential moral legitimacy of firm behavior. When competition is fierce or weak, different acts or strategies become morally acceptable, as well as economically rational. A firm has to develop its own strategy of social responsibility, in light of its competitive position, as well as ethical considerations.

The rationale for responsible supply chain management and stakeholder engagement

“…The firms that pursue differentiation strategies resort to socially responsible activities, along with other marketing activities, such as advertising as a signalling tool (McWilliams and Siegel, 2001), In a similar vein, Van De Ven and Jeurissen (2005) argued that firms that pursue differentiation strategies tend to engage more proactively with social responsibility, when compared to low-cost producers. They reasoned that the differentiation strategies of the socially responsible firms were improving their corporate image by signalling quality and trustworthiness (McWilliams and Siegel, 2001;Van De Ven and Jeurissen, 2005), Cruz and Boehe (2008) also noted that a responsible supply chain is increasingly being used as a differentiation strategy.…”

“…They reasoned that the differentiation strategies of the socially responsible firms were improving their corporate image by signalling quality and trustworthiness (McWilliams and Siegel, 2001;Van De Ven and Jeurissen, 2005), Cruz and Boehe (2008) also noted that a responsible supply chain is increasingly being used as a differentiation strategy. They recognised that a successful organisational performance is dependent on the promotion of laudable activities and on raising awareness of the responsible procurement of materials and products, fair trading and respecting labour rights.…”

“…child labour, working conditions, human rights et cetera) and / or environmental matters (e.g. environmental protection, waste management, recycling, reusing natural resources et cetera) (Hemphill and Kelley, 2016;Hoejmose et al, 2013;Carter and Rogers, 2008;Seuring and Muller, 2008), Such responsible behaviours shield the firms from negative media attention and consumer boycotts (Hoejmose et al, 2013), The companies" stronger engagement in socially responsible supply chain management enables them to manage exposure to risk (Tate et al, 2010;Van De Ven and Jeurissen, 2005), Thus, the businesses" stakeholder engagement and their responsible procurement of materials and products is linked to corporate reputation, which in turn allows them to target discerning customer groups (Phillips and Caldwell, 2005;Roberts, 2003), Kleindorfer, Singhal, and Wassenhove (2005) suggested that responsible supply chain practices can lead to increased profitability, as customer satisfaction and loyalty will improve as a result of a stronger reputation. Conversely, the firms risk losing customers to rival companies if they fail to be responsible in their supply chain.…”

Innovative CSR

“…CSR is today often approached from a strategic management perspective (Van de Ven and Jeurissen 2005). According to this view, companies can reap signiicant beneits from differentiating themselves from competitors through their CSR activities (Burke and Logsdon 1996;Porter and Kramer 2006;Husted and Allen 2007).…”

“…In response to such criticism, a second wave of CSR developed that has at its core a strategic approach (Burke and Logsdon 1996;Van de Ven and Jeurissen 2005;Porter and Kramer 2006). In order to turn into a source of competitive advantage, the basic tenet of strategic management is applied to CSR: A company should manoeuvre itself into a unique position through organising its CSR activities differently from competitors in a way that lowers costs or better serves customer needs (Porter 1985).…”