In Bed with CSR : - A study of corporate philanthropy

Abstract:

Today, companies permanently need to implement solutions aimed at generating competitive advantage that allow them to survive and be successful in ever changing and demanding markets. Therefore, to focus on customers is a common denominator for organizations, aiming to meet their needs and satisfy their expectations.

In this context, society has become one of the players as one of the actors that highly influence corporate behavior. Communities have expressed more mistrust of corporations' because of various scandals. This has put business ethics in the spot light influencing companies to be good corporate citizens, respecting the law but also to create good social values and principles. Today, the level of demand goes beyond the direct impact of the organizations business to also incorporate how corporations can contribute to societal and environmental causes. For corporations, these activities are manifested through the concept of Corporate Social Responsibility (CSR). However, from a corporate perspective, it is difficult to measure if these changes can have a positive impact on a firm. Instead, these contributory practices are mainly measurable from a philanthropic perspective.

Therefore, it occurs to be a divergence between the concepts of competitiveness and business ethics which consequently raised our research question: How do large corporations, involved in philanthropic CSR projects, value the outcome of these projects?

Our purpose with this thesis is to identify how corporations can increase their competitive advantage by supporting philanthropic projects. In order to achieve this, we have conducted a qualitative study where the collection of the empirical data was done through semi-structured interviews with three big corporations. These firms are all services providing companies who support social/philanthropic projects. This support is assisted by a non-profit organization that deals with social projects around the world while at the same time creates social commitment among corporations.

In the theoretical framework, we have presented the concepts of competitive advantage, business ethics, branding, stakeholders and CSR as main theoretic pillars. The thesis also includes theories that relate these theories to each other, such as “Corporations and Society” and “CSR and Competitiveness”.

In previous frameworks we found that there is a gap related to how theories describe the link between ethics and competitiveness in contemporary organizations.

Finally in the analysis section we linked the empirical findings to presented theories and ultimately created a framework showing the correlation between competitiveness and business ethics and CSR. The main conclusions are that business ethics and competitiveness can be linked and bridged by the concept of CSR. Unlike previous theories we concluded that these two concepts are compatible which means that it is possible to get competitive advantage by pursuing social objectives.