The Trouble with Being Average
Sloan Management Review, Vol. 50, No. 3, pp. 79-80, 2009
Posted: 17 Sep 2010
Date Written: 2009
Many researchers and senior executives now agree that under the right conditions, corporate social responsibility initiatives can simultaneously create value for society while also producing valuable rewards for companies. But can multinational corporations capitalize on their corporate social responsibility investments when they expand overseas? Do multinationals profit in foreign markets by investing in corporate social responsibility? Or are social initiatives simply a costly distraction for companies seeking to generate returns from their international ventures?
On the one hand, investments in corporate social responsibility programs can enhance the legitimacy of a company operating outside of its domestic market by establishing a strong reputation for good citizenship. This reputation can smooth the path of international expansion and provide a solid foundation for international success. On the other hand, a commitment to corporate social responsibility can inhibit the ability of companies to reap cost advantages that may be available overseas.
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