Corporate Social Responsibility as a Competitive Advantage: A Hong Kong Perspective
|Sharmin Salahuddin1, Joyce C.S. Tsoi2 and Jacqueline Lam2, (1)Corporate Environmental Governance Programme, Hong Kong; (2)Corporate Environmental Governance Programme|
|As a result of corporate accounting scandals in the US, Hong Kong companies have become aware of the significance of implementing good corporate governance strategies. Meanwhile, there are increasing expectations from various groups of stakeholders, locally and internationally, that companies should take more social and environmental responsibility. The objective of this paper is therefore to examine the relationship between corporate social responsibility (CSR) and company competitiveness in Hong Kong. |
The initial stages of our empirical research findings suggest that local consumers expect a high level of transparency in terms of corporate information disclosure. Also they feel that individual companies should demonstrate a duty of care through actively participating in activities beneficial to the community. They also place a surprisingly high value on the social and environmental aspects of products and services.
In the second phase of the study, two leading local retailers were selected for an in-depth case study review and questionnaire interview. These revealed discrepancies in two major areas. Firstly, between what the companies perceived to be good management and how they themselves operated in practice; and secondly, the companies did not fully appreciate the interests of consumers with regard to their transparency and accountability of social and environmental issues.
The third stage was to investigate the extent to which emerging aspects of ethical business practices are addressed in corporate policies locally. Corporate codes of conduct have become a common means of expressing commitment to the CSR agenda. The study found that in Hong Kong. 97% of retail companies do not have a code of conduct, do not intend to develop one, or cannot confirm its implementation even if they have one.
Based on our analysis, the results confirm that Hong Kong based companies fall far behind their Western counterparts when it comes to environmental and social responsibility. Traditional incentives for implementing CSR such as gaining a competitive advantage do not serve as a significant driving force for Hong Kong companies. The reason behind this phenomenon is that local environmental and social aspects are largely ignored by businesses in formulating corporate strategies. Therefore the real problem is not to identify the drivers for implementation, but rather isolate the local barriers to CSR. There is ample room here for further research in Hong Kong and other Asian economies.
The real value of implementing CSR lies in the potential to strengthen Hong Kong position as Asia world-city. This is important with regard to Hong Kong companiesí ability to adapt to globalisation, particularly in term of withstanding increased competition.
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National Sustainability Strategies
10:30 AM-11:45 AM, Sunday, 12 October 2003, Oral