Corporate Social Responsibility and Competitiveness – Empirical Results and Future Challenges

Abstract

Globalisation has boosted the demand for a more transparent accounting of corporate responsibilities encompassing social, economic and environmental dimensions. Proactive companies search for competitive advantage in markets by differentiating themselves from competitors. One way to do this is to engage in corporate social responsibility. This trend raises the issues of whether any connection between corporate social responsibility and competitiveness exists or even whether engagement in corporate social responsibility contributes to competitiveness. On the basis of an empirical study this article discusses the connections between corporate social responsibility and competitiveness of Finnish firms. The study by VTT and TKK Dipoli explored this connection from the following angles: first, how companies take into account corporate social responsibility requirements of stakeholders, second, how corporate social responsibility requirements guide business activities and decision making of companies and, third, whether and how socially responsible actions enhance firms’ competitiveness. The empirical study consists of case studies in companies identified to be leaders in corporate social responsibility and of a company survey with 150 respondents. As with several other studies, this study also provides support to the existence of a positive connection between corporate social responsibility and competitiveness. The chapter discusses the results of the study and identifies implications, recommendations and proposals for further research on corporate social responsibility and environmental management accounting.