Gupta, Kaanan
(2011)
In what ways Enterprise Rent-a-Car’s CSR activities jointly serve the company’s strategic motives and the interests of the society?
[Dissertation (University of Nottingham only)]
(Unpublished)
Abstract
This study provides an exploratory investigation of the link between Corporate Social Responsibility (CSR) and Firm’s Competitive Advantage concurrently contributing to our understanding of how organizations impact society and potentially benefit a variety of stakeholders (Ray, 2006). The impact that an organization’s corporate social responsibility (CSR) has on their current and potential employees, customers and the society can be crucial to organizational survival (Ibid.). This study, therefore, poses three primary research questions (1) Does CSR lead to improved financial performance or gain of any valuable and rare resources?, (2) What kind of benefits does CSR have that can lead to improved financial performance (Branco and Rodrigues, 2006)? and (3) How does the firm’s approach to stakeholder management influence its ability to protect and enhance the value of these resources? Corporate Social Reputation, the perception of the firm by its internal and external stakeholders, is argued to be a valuable and a rare resource that CSR provides. By building positive stakeholder relationships through CSR the firm is able to positively influence stakeholder assessment and gain ‘reputational capital’. The value of reputational capital lies in its ability to promote operational efficiency and beget service differentiation, which independently as well as in tandem, grant firms superior performance over their competitors (Peters, 2007: 3).
Corporate social reputation is also expected to be positively influenced by the firm’s adoption of corporate community involvement. ‘This paper also briefly reviews the positive effects corporate community involvement can have on stakeholder management outcomes such as employee motivation, morale, commitment, recruitment, retention, development and teamwork’ (Zappalà, 2004: 185). ‘In this study, the link between reputation and CSR is approached through value theory. People are fascinated to organisations they think have similar values and norms as they regard important (Chatman, 1989). Based on Dowling’s (2004) suggestion, a company with good reputation has values that suit to individual’s (evaluator’s) own values’ (Siltaoja, 2006: 92).
‘The main concepts in this paper - CSR, reputation and value, have been defined’ (Siltaoja, 2006: 91). The propositions developed were evaluated via focused semi-structured interviews of the local diversity senior management team of Enterprise Rent-a-Car, East Midland branch in Nottingham, UK. Socially Anchored Competencies (SAC) Model and Stakeholder integrated model are employed to assess the goodness of the fit of the company’s core strategy with their CSR strategy and their stakeholder integration into their collaborative decision making process.
‘The results provide support for the positive influence of corporate social responsibility on corporate social reputation, but no support for a significant relation between their community networks and corporate social reputation. Also, the results indicate that corporate social reputation directly, positively and significantly contributes to a firm’s ability to achieve and sustain competitive advantage for both an internal (return on assets) and external (customer satisfaction and reputation) measure of firm’s financial performance. Further, the findings suggest that the contribution of CSR to financial performance may be indirect and facilitated through a step-wise process which requires the attainment of a positive and superior corporate social reputation before competitive advantage can be achieved’ (Peters, 2007: 4).
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