Corporate Social Responsibility and the Strategic Management Process

Abstract

The adoption of corporate social responsibility (CSR) principles in strategic management is propagated in the relevant literature as a criticism of reckless corporate misconduct or as an appraisal of business resources and power. At the same time, the business logic, management challenges and mechanisms of stakeholder cooperation when adopting CSR principles in the strategic management of companies remain fairly underdeveloped. To study its management challenges, business logic, and mechanisms of stakeholder cooperation we have conducted an explorative case study that investigated the management of a CSR proxy, viz. Health Safety and Environment (HSE), in a multinational company in the petrochemical industry. Our study suggests that the adoption of CSR principles in strategic management is a challenging task even for well prepared companies, which requires a portfolio of activities and resources, i.e.: symbolic actions (e.g. commitment), intangible resources (e.g. repu-tation), tangible resources (e.g. equipment), processes (e.g. communication and training) and incentives (e.g. financial benefits, audits). These are apparently based on a plausible strategic logic, since their purpose is to minimize risks, save costs, and enhance intangibles such as reputation, trust and social capital. Overall, corporate social responsibility is not only an ethical issue but also a strategic one. Therefore it requires a comprehensive managerial approach, where stakeholder cooperation and managerial competence development of corporate social responsibility are paramount.