Corporate Social Responsibility and Competitiveness – Empirical Results and Future Challenges

Abstract

Globalisation has boosted the demand for a more transparent accountingof corporate responsibilities encompassing social, economic andenvironmental dimensions. Proactive companies search for competitiveadvantage in markets by differentiating themselves from competitors. Oneway to do this is to engage in corporate social responsibility. Thistrend raises the issues of whether any connection between corporatesocial responsibility and competitiveness exists or even whetherengagement in corporate social responsibility contributes tocompetitiveness. On the basis of an empirical study this articlediscusses the connections between corporate social responsibility andcompetitiveness of Finnish firms. The study by VTT and TKK Dipoliexplored this connection from the following angles: first, how companiestake into account corporate social responsibility requirements ofstakeholders, second, how corporate social responsibility requirementsguide 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 incompanies identified to be leaders in corporate social responsibilityand of a company survey with 150 respondents. As with several otherstudies, this study also provides support to the existence of a positiveconnection between corporate social responsibility and competitiveness.The chapter discusses the results of the study and identifiesimplications, recommendations and proposals for further research oncorporate social responsibility and environmental management accounting.