Strategy and society: the link between competitive advantage and corporate social responsibility

Governments, activists, and the media have become adept at holding companies to account for the social consequences of their actions. In response, corporate social responsibility has emerged as an inescapable priority for business leaders in every country. Frequently, though, CSR efforts are counterproductive, for two reasons. First, they pit business against society, when in reality the two are interdependent. Second, they pressure companies to think of corporate social responsibility in generic ways instead of in the way most appropriate to their individual strategies. The fact is, the prevailing approaches to CSR are so disconnected from strategy as to obscure many great opportunities for companies to benefit society. What a terrible waste. If corporations were to analyze their opportunities for social responsibility using the same frameworks that guide their core business choices, they would discover, as Whole Foods Market, Toyota, and Volvo have done, that CSR can be much more than a cost, a constraint, or a charitable deed--it can be a potent source of innovation and competitive advantage. In this article, Michael Porter and Mark Kramer propose a fundamentally new way to look at the relationship between business and society that does not treat corporate growth and social welfare as a zero-sum game. They introduce a framework that individual companies can use to identify the social consequences of their actions; to discover opportunities to benefit society and themselves by strengthening the competitive context in which they operate; to determine which CSR initiatives they should address; and to find the most effective ways of doing so. Perceiving social responsibility as an opportunity rather than as damage control or a PR campaign requires dramatically different thinking--a mind-set, the authors warn, that will become increasingly important to competitive success.     

The effect of parental leave duration on early-career wage growth

Work–family policies are meant to support labor force participants, but they often result in lower rewards for those who use them. Based on the ideal worker norm framework and signalling theory, we hypothesise that parental leave duration will result in lower wage growth, above and beyond that of having children. The 1997 National Longitudinal Survey of Youth data from 2000 to 2015 are used to test the hypotheses with a longitudinal sample (14 waves) of individuals in the United States who worked before and after taking parental leave (n = 6723). Discontinuous growth models are used to predict the penalty for parental leave duration for men and women. We find that both men and women suffer from a lower hourly wage growth for taking longer parental leave and that there are more severe penalties for taking paid parental leave than taking unpaid parental leave. Practitioner notes What is currently known?

• utilization of parental leave is significantly related to the wellbeing of employees and their families.
• However, employees are penalized for taking parental leave.

What this study adds?

• Paid parental leave, which is mostly available to skilled, professional employees carries a noticeable early-career wage penalty, but the use of unpaid leave, does not.
• Both men and women are penalized for taking parental leave, but the longer parental leaves women take increase the gender pay gap.

Implications for practitioners:

• HR practitioners should monitor whether employees are penalized for taking parental leave.
• HR practitioners should try incentivizing male employees to take parental leave that is comparable to the one taken by their female employees.