General Motors’ Corporate Social Responsibility and its effect on Competitive Advantage

Introduction

The dimensions and perspectives of CSR have sparked interest in the recent years among businesses, consumers, governments and so forth. CSR has emerged as an essential concept for businesses all over the world because it has become critical to hold businesses accountable regarding the impact of their activities on humanity. Concerns over environmental stability and conservation are the triggers for the need for CSR (Andrews, 1987)

According to Carroll, CSR involves making a positive impact through legal, environmental and sustainability considerations. He proposes that CSR should be voluntary and go beyond compliance to some form of law. In business, it involves adopting policies and practices that are sustainable either through accountability or philanthropy (Carroll, 1997)

General Motors’ Corporate Social Responsibility and its effect on Competitive Advantage

General Motors is one company that has formulated and executed successful business strategies directed at optimally accomplishing its goals and gaining significant market positioning in the automobile industry. At the most basic level, strategy is the formulation of guidelines that enable the execution of specific organizational goals and objectives. Once these strategies are executed efficiently, success is imminent. More specifically, business strategies are often focused on a firm’s performance in its industry vis-a vis its industry competitors. It involves allocating resources effectively and coordinating organizational operations consistently and cohesively with the intent of accomplishing the firm’s goals and consequently earning returns in excess of the industry average. Basically, it involves acquiring competitive positioning in the industry through effective strategies (Grant, 2010).

 

Corporate Responsibility as a strategy for General Motors

The conceptualization of strategy is always inherently linked to a company’s vision or mission statements; which are the core principles through which execution of goals are devised. Well-devised strategies align these core principles and consequently provide a road-map for short and long-term initiatives aimed at growth, achieving competitive advantage and profitability (Porter and Kramer, 2006). Most times Corporate Social Responsibility is a non-compliance and voluntary endeavor that companies choose to invest in as a way to give back to the community and to their consumers. However, sometimes it can be used as a business strategy to achieve competitive advantage over a company’s rivals.  Consumers are starting to notice and consider CSR values while choosing the companies they buy from and most customers are becoming conscious and appreciative of CSR values. This strategic approach to CSR however, poses contentious morality questioning.

 

Regardless, General Motors has continually implemented strategies and policies aimed at improving the communities in which they operate. The company has over the years spent millions of dollars to charities, disaster relief appeals, and through supporting different organizations that offer community service programs such as education, health, improvement of infrastructure and social development. General Motors is concerned with offering exceptional community service which can potentially improve the lives of the community. General Motors has partnered with the Make-A-Wish-Foundation, the WHAS Crusade for Children, among others to help people in need and to also motivate children in their careers. Additionally, General Motors promises quality in the production of its products as a way of appealing to their customers that their needs are important. In order to outperform industry rivals, it is important to produce quality products such that customers will have no complaints. It is important to back up the promise for quality assurance with products that are actually of good quality. CSR helps the community through sustainability and environmental management programs such as education initiatives, housing programs, and adherence to environmental laws that promote environmental conservation such as eco-labelling or climate change initiatives. .

 

General Motors’ operations traverse different countries around the world due to the pressures of globalization. The proliferation of Multi-National Enterprises (MNEs) has prompted globalization issues to include the impact of these MNEs in the countries in which they operate. MNEs are constantly prompted to consider issues such as the use of labor, environmental protection, and reduction of poverty among others in these countries. AS such these MNEs have to align their CSR strategies to align with these issues. Many companies are voluntarily participating in improving the lives of the broader communities regardless of the origins of the company. General Motors has continually participated in activities in emerging countries in which it operates to help tackle issues such as eradication of poverty, sponsoring building schools for the poor and participating in health programs.

 

The benefits of CSR are beneficial for corporations CSR goes beyond compliance or doing the right thing since it can be a strategy to amass great benefits for a company, either directly or indirectly. These benefits include, customer loyalty and retention, good reputation and brand value, minimal law violations etc. (Mohtsham, 2012).