The Trouble with Being Average
By Cyril Bouquet, Andrew Crane and Yuval Deutsch
April 1, 2009
Companies are more likely to achieve profitable sales overseas if their level of corporate social responsibility is either above average—or below it.
Many researchers and senior executives now agree that under the right conditions, corporate social responsibility initiatives can simultaneously create value for society while also producing valuable rewards for companies. But can multinational corporations capitalize on their corporate social responsibility investments when they expand overseas? Do multinationals profit in foreign markets by investing in corporate social responsibility? Or are social initiatives simply a costly distraction for companies seeking to generate returns from their international ventures?
The leading question
Can multinational corporations capitalize on their corporate social responsibility investments when they expand overseas?
Findings
- U.S. public companies with low or high levels of social performance achieved greater degrees of international success than those with moderate levels.
- One implication of these findings: Investments in corporate socialresponsibility may lead to competitive disadvantages internationally unless a high level of social performance can be attained.
On the one hand, investments in corporate social responsibility programs can enhance the legitimacy of a company operating outside of its domestic market by establishing a strong reputation for good citizenship. This reputation can smooth the path of international expansion and provide a solid foundation for international success. On the other hand, a commitment to corporate social responsibility can inhibit the ability of companies to reap cost advantages that may be available overseas.
Our research set out to investigate the relationship between corporate social... To read the complete article, login or sign-up using the form below.
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