تاثیر استراتژی های رقابتی شرکت های کوچک بر روی مشارکت اجتماعی و محیطی آنها The effect of small firms’ competitive strategies on their community and environmental engagement

1. Introduction Corporate social responsibility (CSR) e business firms’ voluntary engagement in broader societal issues e was originally propounded in relation to ethical or moral concerns (Bowen and Johnson, 1953). Over time, however, the notion of moral CSR has morphed into strategic CSR (McWilliams and Siegel, 2001). Firms do good, not only because it is the right thing to do but also because it helps them derive business benefits of sorts, which, in turn, help them gain a competitive advantage. This premise has been tested empirically, but the results have been inconsistent. Many studies found a positive association between CSR and a firm’s performance (Epstein and Roy, 2003; Weber, 2008), some found a negative association (Brammer et al., 2006), and others found that the two are unrelated (McWilliams and Siegel, 2000). These inconsistencies prompted two meta-analytical studies (Margolis et al., 2007; Orlitzky et al., 2003) that concluded that CSR seems to help firms reap business benefits, further mainstreaming the strategic or the business-case argument for CSR. As the reasoning for CSR has evolved from a moral case to a business case (Panwar et al., in press), so too has the way in which CSR is conceptualized. Early scholars viewed CSR primarily in terms of social issues (Bowen and Johnson, 1953); contemporary scholars conceptualize it in terms of corporate sustainability (Lozano, 2008), which denotes an integration of social, environmental, and economic issues. While these benefits can manifest in different ways, they ultimately aim at helping a firm to differentiate itself from its competition (McWilliams et al., 2006) and/or to reduce its costs of doing business (Christmann, 2000; Weber, 2008). Fortuitously, these two potential outcomes of CSR d differentiation and cost reduction d have parallels in the strategy literature that considers differentiation and cost leadership as two major paths that firms could take to gain a competitive advantage (Porter, 1980). In this sense, firms could leverage CSR to achieve a competitive advantage regardless of which strategy dimension they emphasize (Miller, 1988; Spanos and Lioukas, 2001). As such, previous literature has ghlighted the need for integration of CSR with a firm’s overall strategy (Baumgartner and Winter, 2014; Galbreath, 2009; Lamberti and Noci, 2012), but it has not yet explored whether a firm’s choice of competitive strategy is associated with its level of CSR engagement. This paper seeks to fill this gap. This research was conducted using small firms because they represent a wider array of CSR motivations e from CSR as a community obligation (Fitzgerald et al., 2010) to CSR under strategic pressures (Lee, 2008). Thus, a small firm context allows us to have maximum variation in our phenomenon of interest, i.e., the link between strategic choice and CSR. Additionally because small firms exhibit different behaviors in community and environmental realms (Panwar et al., 2015), the paper separately examines the effects of two strategy dimensions (cost-reduction and differentiation) on community and environmental engagement. This paper makes two primary contributions to the CSR literature. On the one hand, it provides insights into how a firm’s level of CSR engagement is associated with its strategic choice. On the other hand, it enhances understanding about small firms’ social engagement. This is a topic that remains dwarfed by a continued focus on large firms, even though small firms are now widely accepted as indispensable partners in achieving sustainability (Jenkins, 2006). The paper is structured as follows. The theoretical background includes a brief literature review about differentiation and cost-leadership paths that result in a competitive advantage. It then outlines key features of small firms’ social responsibility behavior. Hypotheses concerning relationships between competitive strategies and small firm social responsibility are developed in the subsequent section. Finally are sections on methods, results, and conclusions, which appear in that order.