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Good corporate social responsibility for good business

A study by Sassari University takes stock of a delicate issue that is critical for corporate growth.

 

Most businesses now recognize the importance of Corporate Social Responsibility (CSR). It’s a crucial concern, maybe not for all, but definitely for those who set themselves goals that go beyond mere numbers at the bottom of a balance sheet. It is equally crucial to know how to correctly interpret and manage it. This is where CSR can really make the difference. Brunella Arru and Marco Ruggieri (from Sassari University – Faculty of Economic and Organisational Science) have written up a very useful article that helps us to appreciate not just how to handle CSR, but also the various consequences it can have.

Published in the journal Economia Aziendale Online, Vol.  7, June 2016, the article aims to provide a clearer understanding of why socially responsible activities might be seen as having strategic value.  The authors begin by looking at literature on the subject and the associated terminology, then try to pinpoint the benefits of proper CSR as well as the role it plays in “consolidating an organisation’s reputation.”

“Observing our current situation,” they write, “shows how more and more companies are incorporating ethical, social and environmental values into their business strategy as they attempt to fulfil the expectations of a growing number of stakeholders in target markets.” One of the crucial areas addressed in the text is the part which connects CSR to Resource Based View (RBV) and Knowledge Based View (KBV), namely approaches to business analysis which attempt to break production down into its “constituent elements”.

“On recognizing that the social consequences of their operations cannot be severed from their financial performance, in the trade-off between the costs and benefits of responsible business,” Arru and Ruggieri conclude, “business organisations acknowledge that success and competitive advantage are tied to a strategy which must generate profit and positive external consequences, with the resulting benefit to their reputation with employees, customers, investors and the media.”

This article by the two scholars from Sassari is a worthy read: it is comprehensive and clear enough to be read with interest by anyone – both entrepreneurs and managers alike – wishing to gain a closer understanding of the key principles of CSR.

I Benefici della Corporate Social Responsibility nella Creazione di Valore Sostenibile: il Ruolo delle Risorse di Competenza e del Capitale Reputazionale [The benefits of Corporate Social Responsibility in sustainable value creation: the role of competence and reputational capital]

Brunella Arru, Marco Ruggieri

Economia Aziendale Online VOL. 7. 1/2016: 17-41