The nature of business at the global level is changing. Companies are increasingly under scrutiny not only for the creation of value but for good governance that takes into account Society, the Environment and their stakeholders.
Factors like intensive competition, consumer expectations and depleting natural resources have driven companies to include corporate social responsibilities (CSR) within their corporate strategies. This research by the Asian Institute of Technology show that these companies would emerge as the successful companies of the future.
This research established a dynamic framework based on societal, environmental and stakeholder drivers of international firms, who follow best practices, and their effect on the Economic Value Added (EVA) and perceived Competitive Advantage.
The linkage between the societal, environmental and stakeholder drivers and EVA can motivate corporate leadership to adopt CSR vigorously so as to drive the firm towards sustainability through best practices with performance.
Some major findings of this research:
- That Global and Asian values in business are not that different. Therefore, it is possible to consider a common set of Societal, Environmental and Stakeholder drivers, which are applicable across industry and location. Sample firms were from the USA and Asia, from 17 different industries and different levels of Gross Domestic Product countries
- Intangible values of society, environmental and stakeholder can be linked with the measurable Economic Value Added.
- It identified the difference between a firms’ internal perception of its competitive advantage and its actual effect.
- When firms are aware of the relevant critical drivers, they could effectively adapt to emerging-markets. For example, a firm could be proactive and invest more environmental measures to exceed legislative demands or the company might decide to adopt a market-oriented strategy by engaging with consumers and enter new markets with eco-products.
- Firms with good reputation on product and service quality, ability to attract, develop and retain talent and have superior societal and environmental performance are also more attractive to potential investors
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Asian Institute of Technology
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Title of research: SOCIETAL, ENVIRONMENTAL AND STAKEHOLDER DRIVERS OF COMPETITIVE ADVANTAGE IN INTERNATIONAL FIRMS
Doctoral Dissertation title: Societal, Environmental and Stakeholder drivers of Competitive Advantage in International Firms, Author: DR SALIL K SEN, The School of Management, Asian Institute of Technology Bangkok, December 2006
