Question

Discuss the relationship between the social responsibility of a corporation and its competitive advantage. Enrich your answer by examples. (Max 700 words). (Your answers should include outside references (other than the slides and textbook) using a proper referencing style (APA). Using references from SDL will be highly valued.

Answer 1

Solution –

Previously in business organizations social responsibility was viewed as an additional expense and was only seen from the lens of the marketing angle of gaining visibility in the society. Now the thinking has rapidly changed. Social responsibility is now looked at as a differentiator. This is where the whole difference has come. Now organizations with similar products are still able to differentiate and promote themselves basis their participation in the society and the impact that they create in the society as a responsible organization. The organizations now talk about the goodwill image and brand that their social presence creates. This enhances the intrinsic and extrinsic value of the firm and lead to more confidence of the markets.

The major advantages of social responsibility are as follows –

• Brand Awareness – The masses get to know about the product and the associated organization
• Consumer Loyalty and Trust – This is where the company starts to gain consumer confidence due to the engagement with the society
• Customer Engagement – At times the initiatives of the organization encourage the customers to also participate actively. This increases engagement
• Customer Advocacy – This is where the real word of mouth publicity happens and consumers start supporting the organization
• Employee Motivation – At times these initiatives lead to engagement of the employees and their contribution increases their morale.

The best examples of social responsibility and competitive advantage is Coca – Cola Inc. which has started using alternative fuel in their transporting trucks to reduce carbon gas emissions. This has reduced the carbon footprint of the organization and their awareness towards environmental needs have be appreciated by many communities. The other example is Dell which has changed its packaging to a more eco – friendly material and has also managed to reduce their packaging costs. Ford Motor Company has launched their electric vehicle model and EcoBoost Engine which has allowed for the company to gain an advantage on their competitors by introducing the electric vehicle model option for the clients much ahead of their competitors.