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Understanding and responding to societal demands on corporate responsibility

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Better business strategy for improved social performance

A European initiative has researched how companies can enhance their corporate social responsibility. Project efforts promise great benefit for stakeholders and society in general.

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The 'Understanding and responding to societal demands on corporate responsibility' (Response) project was established to study the nature of societal demands on decisions and actions of business organisations from the perspective of business strategy. The EU-funded programme aimed to answer two main questions: first, with regard to how companies understand their responsibilities towards society (so-called corporate social responsibility (CSR)) and how that differs from social actors’ actual expectations; and second, how companies can cope with rising societal demands (as related to their activities) as well as a wider gap between what society expects and what companies are prepared to contribute. A total of 427 interviews involving 19 companies across numerous sectors provided an evidence base from which to proceed. Researchers carried out a complex research protocol that included a one-day in-depth fact-finding mission. Analysis of the collected data revealed significant findings related to topics of interest. Project members found a wide gap between manager and stakeholder understandings of what a company's social responsibilities are, with the first group seen to have a rather more conservative view of corporate responsibility. Stakeholders appeared to embrace a broader notion of an expanded enterprise, attaching importance to integrating the interests of wider stakeholders and society as a whole. Results also indicated that the larger the gap (the so-called lack of cognitive alignment), the lower the social performance. More dynamic industries and regions were associated with better alignment, as was more pressure from external actors. Key internal factors seen to influence the degree of alignment were analysed. Results showed that companies associated with higher alignment were those adopting a differentiation strategy, motivated by an innovation-driven business case and/or prioritising internal change initiatives. On the basis of information gathered and knowledge generated, Response focused on various points to help executives and managers find ways to drive social performance. On the strength of the project outcomes, the team was also able to call attention to significant points for several categories of stakeholders, as well as indicate key implications for careful consideration by relevant policymaking institutions. As such, the results of the Response project have much to offer companies seeking to expand their performance in the area of CSR and, by extension, benefit direct and indirect consumers as well as society as a whole.

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