Conditions for Value Creation in the Marketplace Through the Management of CSR Issues: A Negative External Effects Framework

This article contributes to research on strategic corporate social responsibility (CSR) by detailing the condition-sets governing the emergence of market-led demand for CSR. We build on external effects theory to evaluate the strategic options a company can adopt to manage its negative external effe...

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Bibliographic Details
Published in:Business & society 2011-03, Vol.50 (1), p.28-49
Main Authors: Daudigeos, Thibault, Valiorgue, Bertrand
Format: Article
Language:English
Subjects:
Business
Construction
Construction costs
Corporations
Demand
Economic Conditions
Economics
Emergence
External effects
Externalities
Externality
Management
Marketing
Markets
Social Responsibility
Strategic management
Studies
Value (Economics)
Values
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Summary:This article contributes to research on strategic corporate social responsibility (CSR) by detailing the condition-sets governing the emergence of market-led demand for CSR. We build on external effects theory to evaluate the strategic options a company can adopt to manage its negative external effects in a way that creates social and economic value. We draw on the economic concepts of rivalry and excludability to categorize different social issues and detail the conditions needed to foster market-led transactions on negative externalities. We demonstrate how different types of negative externalities present firms with different strategic opportunities in terms of harnessing market-driven CSR demand.
ISSN:0007-6503
1552-4205
DOI:10.1177/0007650310395544