Are competition and corporate social responsibility compatible?

Abstract

Purpose The purpose of this paper is to explore the connection between CSR and competition to contribute to the CSR concept through analysis of the conditions for its implementation. While fierce global competition has negative environmental and social impacts and may lead large companies to act irresponsibly, corporate social responsibility (CSR) academic literature, especially stakeholder theory, pays little attention to competition and market pressure. It only highlights the competitive advantage a CSR strategy represents for companies. Design/methodology/approach This work draws upon the academic literature in economics and strategic management, on mainstream CSR papers and on the official disclosure and communication from companies listed on the “CAC 40” of the French stock market. In this paper, the authors use the definition of corporate responsibility which integrates companies’ environmental and social concerns into all their activities. Findings The following three major findings arise. First, on a theoretical level and in terms of corporate disclosure on CSR, a large gap in how the economic view and the CSR view of competition are represented was noticed. Second, the limitations of the competitive advantage obtained by CSR strategy was observed while the “demand for virtue” is weak even if the stakeholders’ “expectations” for responsible practices are strong. The author proposes a typology of CSR strategies related to competitive situations. Third, the author underlines the paradox of the CSR competitive advantage: specifically, it is gained only if not imitable; i.e. if companies prevent the mimetic practices which could spread best practices for sustainable development. Originality/value This paper highlights the limits of the CSR concept within the liberal paradigm. The authors argue that the mainstream theoretical CSR framework based on the hypothesis of the convergence between firms’ objectives and the common interest is not relevant. The framework of the neo-institutional theory is more appropriate to analyse the mimetic behaviour in competitive markets and corporate commitments in sector-based codes of conduct that define new norms of social quality.