In today’s business landscape, companies are seeking to engage in more socially responsible behavior than ever before across various industries, including construction. Recently, there has been an increase in corporate social responsibility (CSR) programs, which promotes transparent and socially responsible corporate operations.
A well-conceived CSR program can assist in developing desirable rapport with both internal and external stakeholders and can lead to reduced employee turnover, increased profitability, and increased brand awareness.
This article will define CSR, discuss potential benefits to contractors, and provide guidelines for implementation into corporate strategy.
What Is CSR?
CSR is defined as “the notion that corporations have an obligation to constituent
groups in society other than stockholders and beyond that prescribed by law or union contract.”1 For the past 70 years, the concept of CSR has been intertwined with other constructs such as corporate governance, sustainability, and business ethics.
With the grounds for achieving competitive advantage changing over time, successful contractors need to consider different approaches of management and strategy.2 For industries like construction with high barriers to entry, the practical implications of a CSR initiative can be far-reaching. Smaller entities often find themselves competing against larger companies that may be able to effectively employ synergy, be vertically integrated, or have obtained economies of scale.3 Smaller contractors can integrate a CSR policy into their overall corporate strategy thus achieving positive business outcomes.
With concepts and trends such as Industry 4.04 and sustainability, contractors hoping to be on the leading edge of change must, at times, go against established industrial norms and traditional approaches to evolve within the industry as early adopters of nascent ideology.