STRATEGY AND SOCIETY: THE LINK

BETWEEN COMPETITIVE ADVANTAGE

AND CORPORATE STRATEGY
Michael E. Porter
&
Mark R. Kramer
 The Emergence of Corporate
Social Responsibility (CSR)
• Increasing attention to CSR from
governments, activists, media, and others
• Companies held accountable
• 4 prevailing justifications for CSR:
– Moral obligation
– Sustainability
– License to operate
– Reputation
 Presumption of Conflict
• Traditional approaches assume that
companies and society are in conflict
• Pits business against society
• A zero-sum game
• This is counterproductive, since the two
are interdependent
• Companies fail to recognize the
importance of CSR in their strategies
 Proactive Framework
• In the past, CSR was treated more as an
unavoidable cost
• Better if viewed as a potential competitive
advantage
• Presents a framework
– to identify possible social consequences of action
– To discover opportunities to benefit society and
themselves
– To discover CSR initiatives to address
– To find the most effective way to do so
 Framework for Strategy and
Society
• Looking inside out: identify positive and
negative social impacts of activities
engaged in while doing business
• Looking outside in: societal impacts on a
corporation’s competitive context and
success in what it does
– There will be points of intersection where
there could be problems and/or where there
could be opportunities
 Benefits of the Integrative
Framework
• Identifying the points of intersection
• Choosing which social issues to address
• Creating a corporate social agenda
– “Responsive CSR”
– “Strategic CSR” (when CSR is incorporated into
strategy)
• Creating a social dimension to the value
proposition >>such that the value it offers to its
customers also has a positive social impact.