Corporate social performance: Creating resources to help organizations excel

Abstract

AbstractThe most commonly employed theories of corporate social performance (CSP) tend to ignore firm‐level processes and structures as sources of competitive advantage. But, by taking a resource‐based view (RBV), and by enhancing a firm's capability to engage in socially responsible activities, it can potentially create its own competitive advantages. We examine four major components of CSP—community relations, the environment, diversity, and employee relations. And we show that the ability of a firm to develop its knowledge and skills—as well as policies and implementation plans and procedures—in each of these areas is a potential resource that may in fact provide competitive advantages and higher organizational performance, bringing benefits to both society and the firm.The community dimension evaluates the firm's performance in relationship to philanthropic giving and community support. The environmental aspect considers such firm stewardship activities as pollution prevention, global warming, and recycling. The diversity component measures CSP considering such factors as board member diversity and a firm's hiring, evaluation, training, and promotion policies concerning women and minorities. The employee relations dimension examines such socially responsible human resource practices as innovative employee involvement programs and profit sharing. Together, these capabilities can provide tangible and intangible resources that can provide the firm with competitive advantages. © 2008 Wiley Periodicals, Inc.