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Topic

Corporate social responsibility: a corporate strategic perspective (CSR


Integration into corporate strategy)

Kaushal Yadav
Junior Research fellow, Institute of Management studies (IMS) Devi Ahilya University,
Indore (M.P.)

Abstract
Adopting the change in business is essential for survival in competition, corporate social
responsibility is a new phenomena for many developing countries. Multinational companies
across the country performing CSR activity under the norms and companies Act. Therefore,
companies can integrate that CSR with business strategy for competitive advantage over other
competitor. Many findings support that idea although some of presented contradicted view about
implementation of CSR as corporate strategy for competitive advantage. objective of this paper
to synthesis of CSR and corporate strategy through review past literature on the basis of
secondary data through Books, journals etc. Legal binding on CSR in different countries play
crucial role in integration of CSR as corporate strategy, there is much criticism about that
approach by scholar due to view of social philosophy. However, the finding of research after
analysis that companies can take advantage of this approach but it need to more concern about
position of companies in market and focus on social view about image of company.
Key Words: Corporate Strategy, Corporate Strategy, Social Philosophy, CSR Integration

Introduction
Across the Globe Business has similar philosophy, transaction of goods and money. As we know
CSR is also part of business activity and certainly it is not a one way transaction of business
towards the society. However, the concept of CSR is very pious from the beginning but
unfortunately companies adopted it in a different way. Business leaders, researchers and
governments focus on CSR immensely because of environment and sustainable development.
Therefore, the number of companies set its CSR projects for climate and environment protection
and try to create the image of eco-friendly business in the eyes of stakeholders( society,
Government, NGO) (Colombo and Gazzola,2013). Many Researcher described CSR in a
different ways, different definition provided by academicians, According to Elhauge, sacrificing
profit for the society and interest of community by CSR.( Elhauge, 2005), However, other
Researcher like Carroll and Freidman has given some alternative definition about CSR (Carroll,
1991). Therefore, the goal of this study to find new path for Corporate Strategy and CSR
integration as marketing tool of companies. The core issue with companies, they do not have
proper strategy for CSR activity and projects, they just apply these activity by some social
pressure or unplanned initiative,(Rangan, 2012).
Therefore, some of the academicians indicate society has many needs and companies can take
advantages of these needs by social support(CSR) through its business which not as usual
business activity and improve economic and brand value, (Schaltegger and Synnestvedt,
2002;Porter and Kramer, 2011). it introduced CSR as a strategic approach for business and it
helps to sustainable development of business along with competitive advantage over its
opponent,(Elkington, 1994; Rodriguez et al., 2002; Smallbone, 2004; Porter and Kramer, 2006).
Therefore, implementing CSR as a strategic approach it become core of business strategy along
with all the stakeholders, (Fukukawa et al., 2007; Galbreath, 2008; Vaaland et al., 2008).
However, companies has to understand, business has the responsibility of all the stake holders
unfortunately some of the companies more tilt towards shareholders. Companies should focus on
CSR to full fill all the needs and aspiration of stakeholders in a vital manner like cover all these
dimension(consumers, employee, government, society etc) and try to believe these corporate
social responsibility benefit all the stakeholders,(Sen and Bhattacharya,2001; Balmer et al.,
2007). Although it is not a piece of cake for companies to synthesis CSR and business strategy
for its benefit because performing social responsibility along with advantage of company it's not
seen ethical conduct by many researcher and eminent policy maker. some of the countries had
made norms for CSR and companies has to follow regulation( special reference India company
Act 2013). In spite of companies apply that strategy for advantage like HUL launch some of
awareness program(project shakti, Hygiene awareness in village) and enhance sales ad brand
value of company.

Literature Review

CSR become a very essential part of business now days, and it influence companies image and
philosophy, that is the reason it become integral part of corporate strategy. Therefore, many
researcher describe CSR concept but unfortunately it is still in dilemma what definition should
accepted universally. According to Chang and Chen, the core idea of CSR is to improve
integration between business and all the stakeholders of business, which help to improve social
values and relationship. (Chang, D.-S.; Chen, S.C.-W.; Hu, A.H. 2015).
The concept of CSR are more to synthesis of three main dimension-triple bottom
line,(environment, economic and social) in to stakeholders and it should be voluntary
participation of corporate,(Amaladoss, M.X.; Manohar, H.L.2013). However, companies actively
participating in the CSR projects but unfortunately CSR not create any positive impact on the
business due to wrong strategy towards CSR spending, so it os essential to choose right approach
for CSR and involve all the stakeholders in calibrated manner. (Chang, D.-S.; Chen, S.C.-W.;
Hu, A.H. 2015).
Porter and Kramer described in his paper about an analytical model of social impact of CSR,
where they talked about value of integration of strategy and society and also competitive
advantage and corporate social responsibility, because there are ample opportunity to take
benefit ,(Porter and Kramer 2006) . According to Simons in business strategy management
system provide the opportunity to organize and apply all the strategy along with in-depth
monitoring of activity, so basis on this method companies can apply CSR as strategy and utilize
CSR in fruitful manner for business and society, (Simons 2006).
According to Du and Bhattacharya, any company need to apply effective and conscious
marketing related to CSR it has to very specific on strategic issue of company and
communication with all stakeholders should be clear about CSR policy, because stakeholders are
not so much keen to understand the value of these policy, (Du, S.; Bhattacharya, C.B.; Sen,
S.2010). CSR as corporate strategy become a very conceptual at different stages of CSR
evolution, one of the study explain five stages to integration of CSR and corporate strategy, so
this study connect the relation between CSR and corporate strategy of business,(Mirvis and
Googins 2006). There are other dimension for implementing corporate social responsibility in
any business as strategy, philanthropic CSR is one of them which enhance reputation and brand
image of company which ultimately improve financial performance of companies, cause
(Polonsky and Speed, 2001). another form of strategy where CSR can be apply is altruistic it
help to lower the perception of consumer for skepticism for firms intensions, and enhance the
positive attitude for company in the minds of consumers, (Webb and Mohr,1998; Baghi et al.,
2009). Therefore, a valuable CSR make impact on reputation of companies, these initiative
improve the value of corporation in terms of brand value, positive attitude and increase the
perception of credibility of company, so it is important to apply a calibrated campaign enhance
the credibility of companies, (Lachowetz et al., 2002; Becker-Olsen and Hill, 2006).Many
scholar and academicians have described relationship between CSR and consumer responses
towards companies and provided many dimensions of CSR impact and strategy, CSR (Brown &
Dacin 1997; Handelman & Arnold1999; Sen & Bhattacharya 2001). However, most of
researches only focus on very simple relation of CSR and consumer or other stakeholders, very
few on marketing or strategic perspective of corporate social responsibility.
All the previous research on corporate social responsibility related to business and companies
indicate one important issue, the executive and mangers ready to implement CSR and they
believe it works, but unfortunately they are not fully intended to apply such manner in its
projects which really create greater impact on business. Therefore, CSR as business strategy is
remain very weak section for managers and stakeholders,(McKinsey 2009).
All the work done on Corporate Social Responsibility, despite of CSR as corporate strategy still
a unclear concept and need to be work on that to clarify some precious dimension of CSR. This
is the basic idea to take that topic to understand the different dimension of Corporate strategy and
corporate social responsibility.

Research Methodology

This study is a descriptive study on CSR and corporate strategy, try to integrate both variables in
business which give positive result. Apply strategic logic of business through corporate social
responsibility and try to face challenges in business and society.
This paper is organized as follows: The first part of this paper is a serious effort to connect dot
between previous work on this topic and extract essential relation between CSR and corporate
strategy which was presented in prior research work. Second part work as a integration of CSR
as corporate strategy in business as new model.
We analyze some of referred journal and peered paper on related topic, it is a theoretical paper
on previous extensive work , basically it is a secondary data base research.
Objective of research is synthesis of corporate strategy and CSR policies of company.
The hypothesis of this paper is there is a positive impact of CSR integration with corporate
strategy.
Legal aspect of CSR is also cover specially three major economy (USA, EU, and India) to
understand the regulation and its ramification on business strategy.

CSR Impact on society

The recent years CSR become a major tool of organization to influence society through its
project and enhance the image of company. Government and NGO's from last some years
increased the pressure on organization to be social responsible towards society( Porter and
Cramer 2006). According to Mullerat, company and society both get benefit from this activity
like good quality product, quality services by companies to customers which reduce the defect
and improve the consumer satisfaction,(Mullerat,2010). Therefore, faire and responsible
behavior of companies towards society attract other companies to take welfare step for
communities and marginalized people of our society, it charges emotionally and enhance the
benefit of both society and companies,(Carroll and Buchholtz, 2008). Multinational companies
become more powerful after globalization and produce paramount of profit from the society so
there is a need of robust CSR strategy for society to well being of business in long run and get
optimum profit, (Werther and Chandler 2013). According to Arnold, Most of the companies
these days provide skill training of its employee for new technologies which is adopted by
companies, which improve the skill based capability of employee in society and raise the
opportunity for jobs and high income in market. Moreover, health related support and facility
provided by companies on the basis of social responsibility improve capacity and social behavior
of employee in society, these are some facility provided by organization enhance the health and
education level of society and create a meaningful impact,(Arnold,2010).
Corporate Social Responsibility create impact on society in various dimension:
Environment

CSR
competitive sustainable
product Impact on development
society

education
and health

CSR implementation by companies for the aim of full filling needs and demand of society which
should perform by Government for the society, some time it need to cross the limit of legal frame
work of corporate social responsibility and create the policies in the favor of marginalized
people, ((Enderle and Tavis, 1998). However, the impact of CSR on society in local area where
plan and factories are established should be high due to provide opportunity of job for "son of
soil"
The aim of corporate social responsibility towards society to enhance the positive and robust
relation among companies and all the stakeholders. However, we are aware about the impact of
these activity on society and companies, and basic concept of CSR is welfare of society and fill
the gap between marginalized people and rich. Therefore, European Union Thought about CSR "
The Responsibility of Enterprise towards its society"(European commission 2011).

The legality of CSR

Every country has its own law for any kind of activity and it the right of country to decide what
kind of law enforce on business run in that country. Therefore, regarding corporate social
responsibility many country has its law for companies. However, we only focus on three major
country law in this paper UK, USA, and India.
USA:
In the United State many laws regarding to CSR reporting of companies but it is not mandatory
to spend certain percentage of profit which is in India for companies. Corporation of united state
allowed the legal fiction of separate corporate personality, the decision of corporate regarding
that issue should be taken by board of directors of company either executive of companies which
got power of authority,(Clark,1986).The Corporate Social Responsibility (CSR) Group in the
Bureau of Economic and Business Affairs leads the Department’s work with united state of
America businesses council in the promotion of responsible and value based and ethical
business practices.
Therefore, promoting a holistic CSR activity for enhancing the credibility of companies the EB
Bureau’s mission of fix a sustainable development goal and improve the economic security of
business and organizations in domestic economy along with international forum.
Under the regulation guiding to the companies for value based thinking for future aspect in
business, provide facility to companies for social responsibility through various medium, it is
somehow extension of USA policy for social responsibility. Moreover, try to build understanding
among companies and civil society, labour, environment and all the stakeholders of companies
for better society environment for business " do well by doing good". The duty of loyalty in
business need board of directors to act ‘in good faith and in the best interests of the corporation’
(Scalise, 2005).

INDIA:
The Government of India Introduced CSR related law and provision in the companies Bill 2012,
clause 135 of companies’ bill 2013 focus on CSR and duty under CSR activity.
The clause 135 applicable to all the companies that follow the following;
1. Net worth of INR 500 Cr. or more then that value.
2. Turnover of INR 1000 Cr. or more than that value.
3. Net profit of INR 5 Cr. or more than that.
An average of last three financial year of profit after tax will be calculated for CSR computation,
it is 2% mandatory by GOI.
There is some specific areas for spending money related to corporate social responsibility and
every company should follow the ambit of that rule. However, there is no penalty provision for
violating the rule yet.
UK and Europe :
In united kingdom it is the part of corporate governance and it come under company Act 2006, it
put the responsibility on companies to summit repoart of CSR activity and all the directors to
focus on community and society. However, in UK more emphasis on discloser and transparency
about policy regarding environment and green product, it is the duty of company to promote
these ideas. CSR is, now, an integral part of good governance, for bigger companies in particular
UK.
The European Commission’s CSR agenda for action is:
The commission aim is to improve image of company by enhance the visibility of corporate
social responsibility performed by companies. Moreover, try to building the trust between
business and society and focus on self regulation for CSR activity. Therefore, implementing CRS
policy in various essential field like education, health and environment, and transparent business
process for society. Emphasizing the importance of national and sub-national CSR policies.
Better aligning European and global approaches to CSR. Assuming that the law allows some
scope for managerial activity that may sacrifice profits.

Integration of CSR and corporate strategy:

Corporate Strategy is one of the key element of any organization, and we have seen recent some
decade CSR become integral part of all the big companies in all across the globe. Therefore,
integrating CSR with corporate strategy can be new function of business and it might be win-win
situation for companies and society. If any company apply CSR as business strategy for a long
term benefit and integrate economic activity of business with value based approach, than
company can take advantage of these activity for ling run,(Rochlin,2005). Many companies faces
negative image of CSR in the eyes of consumers, and pay cost for that, loosing brand value,
some of consumer left companies product and so on, so companies may reverse this situation by
right approach to adopt CSR as strategy for business and utilize as assets for competitive
advantage over competitor,(Meehan, 2006). According to O’Connor organizations could expand
the lifecycle of their products and services by making sustainable and credible CSR commitment,
as well as long run sustainable business approach (O’Connor and Shumate, 2010). Another
Researcher produce some fact on that topic, try to reinvent communication strategy of business
and involve CSR in this approach, today all the medium which is available in relevant field are
more conscious about social cause, so CSR will play a positive communication strategy for
business (Morsing & Schultz, 2006). We are aware about the problem related environment and
social issues in our society, so companies can protect the environment by producing green
product, sustainable services according to the need of society. Moreover, companies can produce
the product which reduce the carbon emission, improve the utilization of renewal energy in
production these thing can bring CSR to lime light in society and improve competitive strategy
of business(Arnold, 2010).
Therefore, in the field of business strategy two major thoughts one is Michael Porter Generic
strategy and other id Resources Based View strategy(RBV). According to porter any
organization who is take advantage of competitiveness of business it need focused approach in
business strategy, and it should be valuable and focused towards position that strategy.
Therefore, CSR can be integrate with this view by companies and implemented as new strategy
for business, thus it play the role in competitive advantage (Porter’s 1985). RBV view for the
business strategy is to enhance the internal capacity through internal resources- operational
activity, risk management, and effective Management for the companies competitive advantage.
So, it work by CSR implementation in organization perspective for employee and other internal
stakeholders and improve productivity of companies business( Barney's 1991). However, Carroll
said in 1979 about competitive advantage help to enhance sustainable culture for business, so
CSR implementation in the strategy work as a motivational factor for business (Carroll, 1979;
Wood, 2010). Some of researcher explained about evidence related to Positive CSR emotions.
some Individual investors are ready to participate in the activity which improve the living
standard of society through CSR projects (Jensen et al., 2002). Unfortunately majority of share
holders still in dilemma regarding to CSR projects and its ramification.

Discussion and Criticism of Integration

Abundant research work done by academicians about CSR and its impact on different issues,
CSR now become a controversial topic due to some of wrong implementation of this policy by
organization. However, lot of research find that positive impact of CSR on society and
stakeholders ways (Sen and Bhattacharya, 2001;Worcester, 2009). Another researcher Trudel
said in 2009, consumer love to buy more product of any company who will perform CSR activity
in a large scale even customer ready to pay higher price for product or services (Trudel and
Cotte, 2009). some of research in united state last decade find that CSR provide upper hand of
those companies who spend money on that it give advantage to other non CSR performing
companies (Bhattacharya et al., 2008, 2009). However, lot of research present the fact in favor of
positive CSR impact on society and companies image but unfortunately many research also
present some of other view on this topic like how a company CSR policy affect the stakeholders.
Therefore, Moon explain in his study in there is not specific tool for measure the actual impact of
CSR on company performance, either it is not possible to measure the impact on society by
corporate social responsibility (Moon 2014). In 2009 Golaszewska presented many precious
argument against the corporate social responsibility he said corporate is not the human an sit
should not be social, it is not a legal personality that is the reason we cannot expect moral values
from companies. Another argument presented much social responsibility shown by corporate can
acquire more social power which can be affect policy. Mangers are not skilled in social issues do
it is tough to take right decision regarding to social issues( Gołaszewska-Kaczan 2009).
However, some of other study said that companies CSR action make impact on stakeholders that
impact on both side internal and external which is not so much harm full for any stakeholders
This is based on research on social identity (Tajfel, 1971).Moreover, companies in the position
of same financial status and size might have different strategy for CSR in business, this choice
may create a pressure on stake holders in a different manner, so it is important to select CSR as a
strategy according to the condition of company and position of financial strength,(Van
Bommel,2011).
Therefore, both the side of decision is need to be analyze in a calibrated manner by companies to
adapt CSR as strategy for business perspective. Specially according to the need and position of
particular company.

Conclusion

Corporate Social Responsibility is one the widely acceptable concept all over the world, and
companies adopted this concept for image building. However, this strategy still not apply as
business strategy for competitive advantage over other competitor. In this paper we tried to
analyze the integration of CSR with business strategy for new dimension in business. Therefore,
many research had already presented many facts regarding to integration which was got fruitful
result for business and society. However, some of negative argument presented by researcher
about CSR as business strategy and its impact on society, so it is still very controversial to adopt
CSR as a business strategy. There are legal compulsion related to CSR in every country in a
different ways, regulation and norms about CSR is in India more tough then developed country
like USA and UK. Impact on society through CSR is very visible now days, so company can
adopt this strategy as core function of business. It could be game changer but it should be
according to companies position in market, startup and growing companies are not able to digest
that Burdon of social responsibility.
According to our objective of this paper we would say, CSR integration with business strategy
will be positive for smooth business function and competitive advantage for companies.
Moreover, good for society also, Although still it is a phase of evaluation, so need to focus more
minutely.

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