The key to carving out a high corporate reputation based on innovation: corporate social responsibility

Abstract

Purpose– The purpose of this study is to analyze how corporate social responsibility (CSR) affects a firm’s value added. Specifically, through a combination of Stakeholder Theory and specific concept within the Innovation Theory framework (called Social Innovation Capital), this work explores the relation between effective stakeholder management and how marketable innovation production affects a company’s possibility of achieving a sustainable competitive advantage. By doing so, new insights on CSR management to gain competitive advantage are provided.Design/methodology/approach– The present study analyzes the role of a firm’s international presence, and the company’s social commitment initiatives as drivers of the enterprise’s corporate intangible assets. A company’s reputation has also been considered as a control variable. To achieve this goal, the Spanish market was analyzed. Specifically, those Spanish companies who had the highest reputation in the global reputation pulse and showed the highest level of brand awareness, according to the latest report published by the Forum of Leading Spanish Brands, were considered.Findings– Findings show that companies including their stakeholders’ interests in the knowledge-creation and innovation process are able to enhance their intangible assets and thus the capitalization of such knowledge. Similarly, firms with international presence have a large number of global stakeholders, which also evidences a positive relation with its intangible assets. By honoring the social contract, firms benefit from stakeholders while contributing to social welfare, creating a win–win situation.Originality/value– This study categorizes how intangible assets can be increased through stakeholder’s involvement and firm’s international presence. Consequently, researchers studying business strategy can incorporate these variables as key elements in strategic planning. Scholars in fields of information systems, operations management, knowledge or supply chain management can also evaluate the inclusion of corporate social responsibility into their studies to evaluate how it reflects on tangible assets, production process, supply chain management or the knowledge production life cycle. Moreover, this work illustrates the convenience of using Innovation Theory in conjunction with the Stakeholder Theory to analyze a firm’s intangible assets enhancement.