Strategic CSR, reputational advantage and financial performance: A framework and case example

Heightened social and environmental concerns of the civil society have compelled present day managers to deviate away from the traditional viewpoints of business strategising that merely focuses on shareholder wealth maximisation. While they are primarily tasked with ensuring sound returns on capital and long term economic growth of the firm, the demands of a wider society to be socially and environmentally responsible are exerting enormous pressure on them and cannot be ignored. While many argue that trying to satisfy the divergent stakeholder expectations might cause a dent in the financial performance of the business, the authors portray the case of a company which created added value for the stakeholders by incorporating responsible economic, environmental and social behaviour into organisations' strategies. Their proactive moves have helped them to create a reputational advantage in a highly competitive industry and in turn contributed positively to the financial performance by skilfully exploiting the reputational advantage.