This research proposal seeks to determine how multinational companies can integrate Corporate Social Responsibility (CSR) as a strategy in their business. For the firms to create Blue Ocean and gain competitive advantage, they have to adopt CSR as a marketing tool (Saenz, 2020). It is still impossible to convince most firms to adopt CSR to aid in achieving profitability. Many companies assume that CSR involves an extra cost out of their annual budget with no returns (Jang & Ardichvili, 2020). Most of the time such companies pose environmental and social conflicts in their production systems. As a result, the companies are pressured to take part in social responsibility as a way of giving back to the society and marketing strategy. Corporate Social responsibility has over the years emerged as an organizational priority because most countries have it as legislation. However, most multinationals do not make large investments in CSR initiatives because it is believed to be a no return initiative.
Multinational corporations such as Walmart, Apple, Coca-Cola and Canon are contributing to these global cultural, economic and social issues yet they are part of the solutions. The companies mentioned have been involved in conflicts as far as CSR is concerned in different countries. Coca-Cola and Walmart have been in environmental as well as social conflicts over the years yet they have been having CSR initiatives. In India, Coca-Cola was boycotted by the community because there were drought issues. For these multinationals, CSR is an inescapable priority and they invest moderately in it as they believe it is a cost without return initiative (Pisani et.al, 2017). To sustain CSR a company has to cut its profit and ensure that they have no violation of any right or ethical issue since such activities attract unwanted media attention (Jang & Ardichvili, 2020). CSR sustainability concept will be evaluated based on how corporations use CSR to gain profitability which in return is used in funding initiatives. In that regard, sustainability is how corporations create competitive advantage and value through CSR (Belen & Nuria, 2017). This research proposal paper will be responding to limited number of studies by studying how multinational corporations use CSR to create value and the way the company and the community can benefit in the process. The main focus is on how and whether there can be creation of shared value through Blue Ocean and competitive advantage. This paper will use two case studies of multinational corporations that have adopted CSR in their business and marketing strategies.
The objective of this research is to determine how Multinational Corporations (MNC) uses CSR in order to benefit both the community and the organization. Shared value is the benefit generated from the CSR initiatives. By using CSR, a corporation can gain competitive advantage (Bosch-Badia & Tarrazon-Rodon, 2017). CSR is not only used to increase shared value but also to handle competition in the market since the competitive factors are the same (Kim & Mauborgne, 2017). An organization can introduce competitive factors that are unique to their competitors. With that, it can be concluded that MNCs use CSR to attract customers who can see value in social responsibility and how the community is benefiting, and in the process the corporation will attract uncontested market.
Blue Ocean is a concept that has been adopted by many multinational firms across different countries. Alam and Islam (2017) carried out a research on the Blue Ocean concept and how a company can make good use of CSR to break even in the red ocean. The concept focuses on untapped demand which must be created first. In that regard, the focus of a company should be on how to create value to customers and not the stiff competition. The result of the research was that a corporation can create new market of consumers who see value in responsibility.
Several researches have been done following Potter’s framework and theory of competitive advantage. For instance, Varelas and Georgopoulos (2017) did a research on how a business strategy can incorporate CSR in order to gain competitive strategy. They adopted Potter’s framework which was founded on differentiation, cost leadership and focus. His theory has been used over the years by different small and medium businesses as well as large firms. Other firms have also incorporated the framework into their business strategies and daily operations. The framework will be helpful when evaluating the first research question.
In international business literature, a researcher evaluated the impact of CSR within multinational corporations. Sanclemente-Téllez (2017) extensively studied CSR within International Business literature. The argument in the research was that most of the literature in international business focuses on the view that CSR is either institutional or stakeholder, and they only aim at the motivations and drivers of CSR. Based on the evaluation, it is evident that most of the MNC only become multinational due to external pressure, to improve their reputation and to gain legitimacy and prestige. From the author, limited research has been carried out on returns accrued as a result of being responsible.
Researches carried out based on financial returns accrued due to CSR initiatives are limited and have mixed findings. Iyer and Jarvis (2019) conclude in their paper on financial returns concepts to MNCs that findings and methodologies used in such papers differ extensively. Their research evaluated different cases including how Toms and the Body shop have managed to gain competitive advantage, create value and position themselves through CSR marketing. Annually, the organization makes an effort of donating a pair of shoes for every pair that is sold while the shop uses only natural ingredients in soap making (Bradshaw & Doody, 2017). Additionally, a study was done by Abdelhalim and Eldin (2019) in Egypt focusing on whether CSR can help in achieving sustainable results have contrary findings. According to the authors, CSR is only a means of marketing and for it to gain returns; it should be incorporated in the business strategy.
From the studies, there is a contextual and geographical gap on how CSR can be beneficial to the company and the community when it is adopted in business strategy. This research will base the arguments and conclusions on competitive advantage theory which assumes that the scope and size of the marketplace is constant. Therefore, there is stiff competition among corporations on who will slice the bigger slice of the market and who create shared value.
Research Questions and Methodology
The research questions in this paper are; how can companies adopt CSR in their business strategy in order to achieve competitive advantage? How can companies create Blue Ocean through CSR, and how can multinational companies adopt Blue Ocean Strategy to create a shared value? CSR in international business has not empirically been studied widely, therefore, this research is dependent on the information on the companies’ motivations, strategies, operations, competitive factor drivers and market characteristics. Data will be gathered from the websites of the companies, statements, media documents and records. In order to obtain relevant answers to the research objectives, the study will only evaluate contemporary initiatives; recent, ongoing and present events.
After research, two companies; Marine Harvest and Stormberg have been identified since they meet the needs of this research as they adopted CSR as a business strategy. The two companies have business operations that are designed in a way that benefits both the community and the companies by increasing the firm’s profitability. It is important to note that, there are limited evidence of the relationship on CSR, competitive advantage, shared value and Blue Ocean.
This research will adopt a case study method because of the fact that it is capable of handling a wide range of evidence, and its ability to have a deep and wide evaluation of the objectives in the research questions. Multiple case study design will be adopted because it is believed to be robust and more compelling (Harrison & Mills, 2017). This research will use qualitative research design because the research is not concerned with the number of cases but in identifying identical processes in the two companies and then make a generalization to all multinational corporations.
Secondary data will be used and obtained mainly from company documents, records, articles, journals, researches from other authors, and media. The documents will be evaluated extensively to provide a deep understanding of companies’ operations, strategies, market conditions and mindset. Grounded theory focuses on the fact that there exists a repetitive interplay between collection and analysis of data (Chun & Francis, 2019). The theory has been used by various researchers and it is proved to be credible while making generalizations. Data analysis will adopt grounded theory, which is mostly used in qualitative data analysis.
The researcher may be sloppy and at the same time, the case studies may not be rigorous enough. There is a possibility of the researcher being subjective and wrong in the interpretation of the data. Additionally, case studies only give generalizations which are considered analytical and not statistical results or both. The time allocated for the research may not be enough to go through many case studies.
The collected data will be based on secondary sources such as documents which are sourced from the internet. Some of the important information such as company operations and reviews may be withheld by the companies thereby not being available online. It may be impossible to receive exact information because of unlimited information. Most of the documents that the researcher will be relying on may have credibility issues as they are availed by the media and the company. The information may be considered reliable but it is meant for a particular audience and purpose, not research.
The researcher is expecting to prove that CSR initiatives can be integrated into a company’s strategy to be beneficial to financial returns of a company and the community at large. The CSR initiatives can become a business opportunity meaning that it can increase the financial returns which can be used in funding and sustaining financial responsible actions. After critically evaluating the two companies, then it will be evident that adopting CSR into business strategy is a way of increasing financial returns and giving back to the society. Further research will be advised on this area of CSR and financial returns based on the results of this research.
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