Corporate social responsibility And Competitive Advantage: A Comparative Study Across Selected Ghanaian Industries

ABSTRACT

Corporate Social Responsibility (CSR) has become an integral part of business practice over the last decade and this has led many corporations to dedicate a section of their annual reports and corporate websites to CSR activities. Although extant literature with regard to CSR has examined a number of themes such as the link between CSR and financial performance, very few studies have been conducted on CSR and Competitive Advantage (CA). As such, this paper was aimed at identifying and determining the link between CSR and CA in some selected Ghanaian industries. The study employed a cross sectional survey design and adopted both qualitative and quantitative approaches for data collection. The target population for the study consisted of the head offices of companies listed on the Ghana Club 100 which have consistently appeared from 2010 to 2012 in the Greater Accra Region of Ghana. Data used for analysis were drawn from one hundred and seventy nine (179) members of management from sixteen (16) companies. Findings of the study showed a positive effect of CSR on CA with competitive strategy, company type, and company size moderating the effect of CSR on CA. Company structure had no effect. The results further revealed a stronger relationship between CSR and CA for larger companies than smaller or medium-sized companies. Thus, companies with a large number of employees (large companies) do more CSR activities, and in turn, have a more defensible position than that of small or medium-sized companies. Again, the results indicated that, there were no differences in CSR practices and competitive advantage across the various sectors. However, external CSR activities especially, education and health - related CSR had more impact on CA. More so, it was discovered that a majority of the organizations do not have a particular strategy for implementing CSR activities. In addition, there were no budgets allocated for CSR activities, and no policies or documents on CSR activities and this means organizations do CSR as and when it becomes necessary. It was thus recommended that CSR activities should be clearly integrated as part of the firm’s corporate and business-level strategies. Again, management should take into consideration workplace related CSR activities so as to gain more competitive advantage. It was also recommended that organizations should have policy frameworks to set clear-cut parameters for CSR activities so as to avoid executing CSR haphazardly.