Saturday, 8 November 2008

Michel E. Porter and Mark R. Kramer, ”Strategy& Society, The Link Between Competitive Advantage and Corporate Social Responsibility“




This is Porter’s view of CSR. The view has the same framework as Competitive Forces. He criticizes that many CSRs are not productive because firms pits business against society and CSRs are too general to exploit firms’ strengths.

Authors are claiming today’s justifications of CSR are meaningless and have no implication. These justifications are moral obligation, sustainability, license to operate, and reputation. Sometimes, sustainability works as reducing waste, but it is not enough. These mistakes occur from separate from independence of CSR from business unit.

Competitive context:
According to authors, competitive advantages of firm for society are categorized into four area:
1, the quantity and quality of available business inputs
2, the rule and incentives that govern competition
3, the size and sophistication of local demand
4, the local availability of supporting industries

Social issues:
Authors also say social activities divided into three:
1, Generic Social Issues
2, Value Chain Social Impact
3, Social Dimensions of Competitive Context

Step:
Finally, they say firms should take action in the following way:
1, Creating a corporate social agenda
-Responsive CSR, internal process(acting as good citizen, attuned to the evolving social concerns of stakeholders, and mitigating existing or anticipated adverse effects from business activities.
-Strategic CSR, outside-in prosess
2, integrating inside-out and outside-in practices


I think categories of CSR and analysis nowadays CSR is good, but others are not so. The example is all multinational companies. Its kind of boring because many firms is not MNCs. And it is most important, I think.

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