Corporate Social Responsibility for Competitive Advantage

Maintaining the natural resources relied upon for operations is a key CSR benefit to companies.
Maintaining the natural resources relied upon for operations is a key CSR benefit to companies. (Image: BananaStock/BananaStock/Getty Images)

The ability to derive sustainable competitive advantages from implementing corporate social responsibility (CSR) are increasingly limited by the rate that otjer companies integrate CSR into their business operations. Before CSR's rampant evolution in the early 21st century, companies on the cutting edge of social and environmentally responsible behavior could more easily build a strong brand from these types of actions.

CSR Basics

CSR is a very popular business ideology that has evolved quickly during the early 21st century, as the government and public have placed higher expectations on companies to act with social and environmental responsibility. CSR stems from basic business ethics, but it asks more of companies, including involvement in communities and adherence to generally accepted environmentally responsible behaviors, including preservation, renewal and reuse of materials, and active green-friendly operations and programs.

Early Adopters

Many companies were able to promote their social and environmental activities to build competitive brand advantages before CSR became a common staple of the U.S. business environment. Ben and Jerry's Ice Cream has notoriously separated its brand from the many other ice cream companies by strongly promoting its social and environmental activism since the company began in 1978, according to the company's website. The company even maintains three mission statements - a Social Mission, Product Mission and Economic Mission. Scandinavian company IKEA is another example of a company that has long incorporated sustainability and social responsibility into its core message of providing its customers a "better everyday life." Use of solar energy and natural reforestation are a couple activities noted on the company's website.

Sustainable Competitive Advantages

Sustainable competitive advantages, along with target markets and retail format, make up the three main elements of a company's retail strategy. Competitive advantages are any traits, associations, actions and activities that give a company significant business benefits over its competitors. For these advantages to have sustainability, they have to be difficult to replicate. Companies that can develop several major sustainable advantages are more likely to maintain long-term success.

CSR Sustainability

CSR as a sustainable competitive advantage is difficult to discern. It is likely that companies like Ben and Jerry's and IKEA can continue to gain from loyal community and customer relationships because of their early adoption of CSR business practices. However, as more companies have replicated development and promotion of socially and environmentally responsible business programs, the actual benefits to these companies is harder to project. In his October 2008 Forbes article "CSR Doesn't Pay," David Vogel argues that CSR is more about avoiding public backlash than producing measurable business results based on its rampant growth in the early 21st century.

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