Corporate Social Responsibility and Competitiveness

During the past twenty years corporate social responsibility (CSR) has become an increasingly important agenda item in the board room and executive suite of most major corporations. Gone are the days when paternalistic businesses can build their reputation on mere propaganda as patron of the local arts and other feel good, pet projects of management. Today’s global business environment requires a substantially greater understanding of the firm’s social obligations to a broad range of transnational stakeholders. Companies that fail to grasp the significance of this change can face substantial consequences. For companies that understand and embrace the difference, and integrate it into corporate strategies, it can lead to a significant competitive advantage. Peter Drucker long argued that a firm is merely a social actor operating in a social environment. He understood the need to actively manage the social environment, or be managed by it. Importantly, Drucker believed businesses have a responsibility to serve the interests of society beyond the economic value that they create. This study aims to examine the evolution of CSR and it relationship to the competitiveness of the firm.