Competitive Advantage and Corporate Social Responsibility Link

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Table of Contents

Summary
Key Learning Points
Relevant Statement to the Session
Critical Analysis
Practical Implications
Learning Reflections
Works Cited

Summary

Corporate social responsibility is a highly important condition for the successful functioning of an organization. In order to create a socially favorable business environment, it is necessary to establish the connection between organizational and social activities. The article under analysis explores possible pitfalls of ignoring these principles, as well as analyzes the strategies that positively influence the development of fruitful business relations (Porter and Kramer 1).

The author insists on the fact that corporate social responsibility should not be considered in the context of cost-effectiveness. Rather, it should be regarded as a genuine source of innovation, opportunity, and competitive advantage. At this point, the article seeks to propose a new vision of the relationships between society and business that consider social welfare and corporate success as an important construct of any business organization. Additionally, the article focuses on social corporate responsibility as the viable underpinning for gaining social recognition, as well as a fresh insight into a series of activities that produce benefits both to society and to an organization.

Key Learning Points

The article focuses on the origins and preconditions of corporate social responsibility, as well as provides examples of companies that face challenges of social environment;
The author asserts that the lack of social responsibility introduces the foundation for building favorable relations with the community;
While deliberating on the benefits of corporate culture development, the scholar introduces four justifications of corporate responsibility – sustainability, moral obligation, reputation, and license to operate;
A business organization should take a variety of stakeholders’ responsibilities into the deepest consideration and monitor how the external environment influences its internal business activities;
The company should be fully aware of the importance of integrating two basic components – business activities and social response to them, which shapes the ground for corporate social responsibility;
A business corporation has a potent impact on social change; so do social activities influence the corporation’s success. These mutual influences should be underscored;
“An affirmative corporate social agenda moves from mitigating harm to reinforcing corporate strategy through social progress” (Porter and Kramer 6)
There are three main pillars of successful performance in a social setting; these include valuing chain social influences, generic social issues, and social perspectives of competitive context;
The organization should not only react to social pressure but also introduce corporate strategies that can bring maximum benefit to the community;
The article explains how managing the external environment can be helpful for gaining a competitive advantage;
The author also focuses on inside and outside practices contributing to social and organizational’s welfare.

Relevant Statement to the Session

With regard to the social responsibility framework, the article approves the idea that business organization should be committed to the interests and welfare of society, as well as to the welfare of their employees. Therefore, the author also recognizes the connection between society and a business organization. More importantly, each business strategy worked out within a business setting should respond to external pressures as well.

In the article, the scholar adheres to the importance of considering moral and ethical stands of social responsibility because it shapes moral and ethical frameworks for acting within a business environment. As proof, the author states, “The moral appeal – arguing that companies have a duty to be good citizens and to “do the right thing” – is prominent in the goal of Business for Social Responsibility” (Porter and Kramer 3). Therefore, the moral imperative should be prioritized for every organization that deals with the external environment and strives to adhere to the international standards of carrying out business.

The analysis of moral responsibilities is also associated with the overview of the external environment and its impact on an organization’s productivity and performance. Additionally, they also outline the leading ethical and philanthropic responsibilities that a company should follow.

Apart from responsibilities, that company touches on the main stakeholders of an organization, including customers, employees, investors, and environmental organizations. At this point, the focus is made on sustainability that appeals to social, economic, and environmental performance. More importantly, the author specifies that sustainability contributes to the transparency of business transactions within the organization, as well as establishes a philanthropic outlook on society. Business managers should be more concerned with the concept of sustainability to create fruitful relations with the community.

Critical Analysis

Strong commitment to social welfare contributes to the profitability and reputation of an organization, as well as to higher social standards of living in the region in which this business operates. As an example, the adherence to philanthropic responsibilities was exemplified by Nestlé’s case. In particular, the organization decided to start a business in an Indian region and promote its dairy products.

However, due to the fact that delivering milk from distant locations required increased costs, the organization’s managers encouraged the local farmers to sell their milk for producing products. To ensure the high quality of the product, the trucks were accompanied by veterinarians, agronomists, and nutritionists who were responsible for examining cows’ diet and ensuring high quality of milk. As a result of such cooperation, farming experienced a significant rise and, as a result, the region has rapidly improved its economic situation.

Practical Implications

Leading multicultural organizations in the United Arab Emirates, such as Abu Dhabi National Oil Company, are faithful to the principles of corporate social responsibility. In particular, the organization is committed to the development and advancement of UAE society by integrating the internationally acknowledged principles. The growth of educational, social, and economic sectors produce a new framework for training and educating highly qualified professionals that can contribute to the amelioration of the UAE economy in general. In its turn, the fruitful economic environment greatly promotes the organization’s business activities and increases its profits.

ADNOC realizes the significance of financial investments in their activities and, therefore, taking the interest of stakeholders is of priority for the organization. All these principles are highlighted in the context of corporate social responsibility, as well as the challenges of the external environment. Additionally, to promote and enhance corporate culture, the company has also introduced a number of social and educational projects, including Zayed University, Abu Dhabi Educational Zone, and Sports Clubs.

Learning Reflections

Carrying out a business successfully implies producing social and cultural welfare to the community. Therefore, investing in capital, buying goods, and offering jobs have a potent impact on society as well. The article, therefore, highlights the importance of promoting societal values and economic prosperity. Both governmental organizations and NGOs withdraw the primary objects of the majority of business organizations – to gain profit – because such ventures are doomed to be a failure. In fact, considering the external environment and the organization’s main stakeholders is the key to developing a powerful and solid framework for tackling business activities and sustaining competition.

Works Cited

Porter, Michael E. and Mark R. Kramer. “Strategy & Society: The Link between Competitive Advantage and Corporate Social Responsibility” Social Impact Advisors. (2006):1-14. Print.

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