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Corporate Social Responsibility and the Strategic Management Process (S. 89-90)
Nikolay A. Dentchev, Aimé Heen and Derrick P. Gosselin
The adoption of corporate social responsibility (CSR) principles in strategic management is propagated in the relevant literature as a criticism of reckless corporate misconduct or as an appraisal of business resources and power. At the same time, the business logic, management challenges and mechanisms of stakeholder cooperation when adopting CSR principles in the strategic management of companies remain fairly underdeveloped.
To study its management challenges, business logic, and mechanisms of stakeholder cooperation we have conducted an explorative case study that investigated the management of a CSR proxy, viz. Health Safety and Environment (HSE), in a multinational company in the petrochemical industry. Our study suggests that the adoption of CSR principles in strategic management is a challenging task even for well prepared companies, which requires a portfolio of activities and resources, i.e.: symbolic actions (e.g. commitment), intangible resources (e.g. reputation), tangible resources (e.g. equipment), processes (e.g. communication and training) and incentives (e.g. financial benefits, audits).
These are apparently based on a plausible strategic logic, since their purpose is to minimize risks, save costs, and enhance intangibles such as reputation, trust and social capital. Overall, corporate social responsibility is not only an ethical issue but also a strategic one. Therefore it requires a comprehensive managerial approach, where stakeholder cooperation and managerial competence development of corporate social responsibility are paramount. Keywords: business models, corporate social responsibility, qualitative research, strategic management process, competence based management.
The principles of corporate social responsibility (CSR) are resolutely propagated by academic, political and economic forums. In a broader sense, CSR principles encourage organizational conduct that results simultaneously in profit generation and in a contribution to prevent or solve social and environmental problems (Carroll, 1979). The arguments in favor of these principles range from criticism of reckless corporate misconduct to appraisal of business resources and power.
On the one hand, the danger of scandalous managerial conduct in cases such as ENRON, WorldCom, Parmalat, and many others has been eschewed in numerous publications and debates. On these occasions, managers are rebuked for their amoral (or even immoral), selfcentered, profit-driven decisions that endanger the proper organization of social life. In this context, CSR principles are seen as a necessary remedy to prevent such a danger.
On the other hand, it is generally perceived that companies (especially multinationals) have built lots of slack resources and have gained much power. Imaginative or real, these perceptions leave the impression that business investments in CSR activities are easy to make. In this context, CSR is seen as a discretionary act of managerial benevolence. Overall, arguments along these lines suggest that the adoption of CSR principles in the strategic management process of companies is not only necessary from a moral perspective but also very easy to accomplish in practice.
However, it is rather effortless to suggest that the adoption of CSR principles goes without any challenges. The discussion on this topic would not reach its contemporary popularity, if the adoption of CSR principles in strategic management were so easy. Besides, top business schools such as Harvard Business School and INSEAD would not launch executive programs on corporate social responsibility, if its management was “a piece of cake”. Neither would senior managers actively participate in business networks (e.g. CSR Europe and its daughter organizations of the European Union member states), preoccupied with sharing experiences on CSR management.