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The Competitive Advantage of Corporate Philanthropy

The Competitive Advantage of Corporate Philanthropy. Learning Objectives: to understand some basic questions about CSR; to discuss the common justifications for CSR; to identify several models or frameworks to identify, prioritize and manage CSR impacts.

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The Competitive Advantage of Corporate Philanthropy

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  1. The Competitive Advantage ofCorporate Philanthropy Learning Objectives: to understand some basic questions about CSR; to discuss the common justifications for CSR; to identify several models or frameworks to identify, prioritize and manage CSR impacts

  2. Basic Questions SurroundingCorporate Social Responsibility Which companies are known for positive CSR activities? Which companies are known for negative CSR activities? What would economic theory (capitalism) say about CSR? The Porter & Kramer thesis – CSR efforts have not been as productive as they could be, because: • They pit business against society • Pressure managers to think about CSR in generic terms, rather than what’s appropriate for each firm’s strategy

  3. Common Justifications for CSR • Moral obligation • Sustainability • License to operate • Firm reputation Which of these justifications do you find appealing ? Even if CSR can be justified, would it be better if stockholders made philanthropy decisions ?

  4. Porter and Kramer’s “Full” Model for Strategic CSR • Look inside out (value chain) to determine how firm operations affect social issues • Look outside in (diamond framework) to determine how social issues affect firm operations. • Responsive CSR: firm acts as good citizen and mitigates harm from value chain • Strategic CSR: firm transforms value chain impacts and addresses social issues that affect its competitive context

  5. Porter’s Generic Value Chain Looking Inside Out: managing social impact of value chain activities

  6. Context for Firm Strategy and Rivalry Factor (Input) Conditions Local Demand Conditions Related and Supporting Industries Porter’s Diamond Framework – Four Elements of Competitive Context Looking Outside In: social influences on competitiveness What do each of these four elements comprise ?

  7. Firm Social Issues Firm Social Issues Firm Social Issues Prioritizing Social Issues Porter and Kramer proposes the following classification scheme to prioritize social issues: Generic Social Issues Value chain Impacts Competitive Context Example of each type of social issue ?

  8. Strategic Approach to CSR

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