Societal, environmental and stakeholder drivers of competitive advantage in international firms | |
| Author | Sen, Salil Kumar |
| Call Number | AIT Diss. no.SM-06-12 |
| Subject(s) | International business enterprises Competition, International |
| Note | A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy |
| Publisher | Asian Institute of Technology |
| Abstract | The configuration of business at the global level is transforming with the growing need for sustainability coupled with growth. Firms are differentiating themselves by adopting strategies that are encased in best practices, are benevolent to the society and benign to the environment. Intensified competition, consumer expectations, governance imperative and natural resource crunch have driven corporate leadership to synthesize their corporate soci~l responsibilities with corporate strategies. A value-driven firm needs to maintain the highest standards of business conduct, while meeting performance targets. Investors are incorporating sustainability evaluations in their due diligence, employees adhere to firms with reputation and stakeholder pressures encourage innovation. Firm growth creates visibility. Businesses recognize a set of responsibilities. Researchers claim that propositions about Corporate Social Responsibility are intuitively appealing but the operationalization and adoption of such initiatives are not easy. There is a need f~r an appropriate framework for the implementation of CSR programs that enhance a firm's strategy. A related challenge is the diffusion of the CSR-strategy linkage from the leadership level to the operational level. This research presents a dynamic framework based on societal, environmental and stakeholder drivers of international firms, who follow best practices, and their effect on the Economic Value Added © and perceived Competitive Advantage. The linkage of the societal, environmental and stakeholder drivers with the Economic Value Added (EVA) provides the justification for corporate leadership to pursue CSR. This research focuses on a set of societal, environmental drivers and stakeholders drivers relevant to international firms that drives competitive advantage assessed by Economic Value Added (EVA). Firms were classified into three groups based on high positive, low positive and negative EVA. Responses received from firms from a sample of firms from USA and Asia were analyzed. A case analysis of four International firms (two from the USA/Europe and two from Asia) showed that the Global and Asian emphasis of companies on the value drivers are not very different. The analysis supported a common set of Societal, Environmental and Stakeholder drivers. These drivers are applicable irrespective ofIndustry and location differences. This study links the apparently 'intangible' values of societal, environmental and stakeholder drivers with the 'measurable' Economic Value Added. It identifies the difference between firms' 'internal' perception of Competitive Advantage derived from the societal, environmental and stakeholder drivers and its actual effect as assessed by Economic Value Added. This research includes qualitative support to the empirical analysis done by the questionnaire survey through responses - from more than forty eminent Corporate CSR practitioners, participation in International CSR Conferences and Doctoral Colloquiums. The reviews and insights from practitioners, academics and reviewers provide additional qualitative insights. 'Businesses are in the business of building healthy communities'. This simple yet profound tenet postulates the need for the linkage between CSR and Strategy: when firms utilize the societal, environmental and stakeholder drivers through adoption of best practices, their 'sphere of A significant implication from this research is the involvement of stakeholders in the form of drivers in a firm's strategy becomes a valuable capability which leads to perceived competitive advantage. The key drivers are not standardized across firms. Individual -companies need to review their initiatives and applicability closely. The case studies and the survey undertaken in this research study indicates the applicability of Societal, Environmental and Stakeholder drivers across regions (USA and Asia), across industries (sample firms were selected from 17 different industries), across differing levels of Gross Domestic Prod.uct (sample firms are from highly varying GDP countries). Firms with good reputation on product and service quality, ability to attract, develop and retain talent and have superior societal and environmental performance, attract capital resources. This research highlights the role of EVA as an assessor of Competitive Advantage. EVA has the potential to become an integral entity in the strategy implementation process of a firm. Companies are increasingly under scrutiny not only for the creation of value but for good governance that incorporates the Societal, Environmental and Stakeholder driv~rs. Managers are being motivated by EVA-linked rewards as a sustainable metric for performance. Customers, suppliers and network partners are valuing the reputations of companies with whom they are associated |
| Year | 2006 |
| Type | Dissertation |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Swierczek, Fredric W. |
| Examination Committee(s) | Singha Chiamsiri;Shivakoti, Ganesh;Chatterjee, Samir Ranjan;Dimmitt, Nicholas |
| Degree | Thesis (Ph.D.) - Asian Institute of Technology, 2006 |