Value creation through Businesses’ Support of Community Development

Abstract: The demand for integrating Corporate Social Responsibility into business has increased during recent decades. Despite the dramatic growth of demand for CSR, some researchers still criticize that it is a waste of money. However, other researchers see CSR as an opportunity and advantage to become more profitable and create a better reputation, etc. In this work, the researcher explores the driving forces for the company to support community development through implementing CSR activities, as well as examines the impact of such activities on community development. To make this study more concrete, the case study of Sparbanken Skåne was chosen. Sparbanken Skåne is a Swedish bank that supports the local community. Since Sweden is one of the leading countries with CSR and Sustainability, the study focuses on a company from this country. To find out the alignment of CSR in business, a literature review was done. The theoretical studies helped to come up with the model of Four Prevailing Justifications for CSR by Porter and Kramer (2006). This model will help to understand the bank’s driving forces to create value for the community. To understand the impact of the CSR activities of the banks, the theories developed by Garriga & Mele (2004) were used. To understand and test the two models, seven interviews were conducted with the bank representatives and their stakeholders. The analysis shows that the bank has one main driving force, which is not tied to the company's financial interest but to making positive changes in the community. The study highlighted the impact of banks on community development. It was identified that theories of CSR are overlapping and can not strictly relate to only one theory. The researcher advances the discussion of value creation through CSR, including its integration into business model and strategy. Also, this study highlights the impact the company has on community development.