Economic Research-Ekonomska Istraživanja

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Exploring the relationship between corporate

social responsibility and firm competitiveness

Jintao Lu, Licheng Ren, Siqin Yao, Jiayuan Qiao, Asta Mikalauskiene & Justas
Streimikis

To cite this article: Jintao Lu, Licheng Ren, Siqin Yao, Jiayuan Qiao, Asta Mikalauskiene &
Justas Streimikis (2020) Exploring the relationship between corporate social responsibility and
firm competitiveness, Economic Research-Ekonomska Istraživanja, 33:1, 1621-1646, DOI:
10.1080/1331677X.2020.1761419

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ECONOMIC RESEARCH-EKONOMSKA ISTRAŽIVANJA
2020, VOL. 33, NO. 1, 1621–1646
https://doi.org/10.1080/1331677X.2020.1761419

Exploring the relationship between corporate social

responsibility and firm competitiveness
Jintao Lua,b, Licheng Rena,b, Siqin Yaoa, Jiayuan Qiaoa, Asta Mikalauskienec and
Justas Streimikisd,e
a
Department of Business Administration, School of Economics and Management, Taiyuan University
of Science and Technology, Taiyuan, China; bResearch Center for Corporate Social Responsibility,
Taiyuan University of Science and Technology, Taiyuan, P.R.China; cKaunas Faculty, Vilnius University,
Kaunas, Lithuania; dLithuanian Institute of Agrarian Economics, Vilnius, Lithuania; eUniversity of
Economics and Human Science in Warsaw, Warsaw, Poland

ABSTRACT ARTICLE HISTORY

This study deals with the relationship between corporate social Received 29 September 2019
responsibility (CSR) and firm competitiveness. Based on the com- Accepted 20 April 2020
prehensive literature review, the theoretical model, providing link-
KEYWORDS
ages between CSR and corporate competences, has been
Corporate social
developed. The created model was empirically tested, and the responsibility; competitive-
case study in Lithuania was conducted based on the assessment ness; financial capacity;
of influence of different social responsibility dimensions (environ- quality of production;
mental, social, economic, shareholder and voluntariness) on separ- customer’s needs;
ate elements of competitiveness (financial capacity, quality of company’s
production, satisfied needs of consumers, efficiency, introduction image; reputation
of innovations and company’s image). The survey of 33
Lithuanian companies, i.e., all companies in Lithuania that have JEL CLASSIFICATIONS
joined Global Compact, was performed by employing question- M3; M14; M21
naires. The conducted empirical research confirms that separate
social responsibility dimensions (environmental, social, economic,
shareholder, voluntariness) differently affect separate elements of
competitiveness: financial capacity, quality of production, satisfied
needs of consumers, efficiency, introduction of innovations and
company’s image. It has been found that neither the quality of
production nor the possibilities for introduction of innovations in
a company are affected by the dimensions of social responsibility.
Whereas company’s image, reputation and the factor of satisfied
needs of consumers are affected by all dimensions of social
responsibility that have been analysed. It has been noticed as
well that the element of competitiveness, i.e., financial capacity, is
affected by environmental and economic social responsibility
dimensions; whereas, productivity and work efficiency are mostly
related to social, shareholder and philanthropic dimensions. The
main input of this paper is the definition of linkages between
specific Corporate Social Responsibility dimensions addressed by
the Global Compact and the main elements of competitiveness
that have been identified based on rigorous and systematic litera-
ture review. The paper applies a completely different approach

CONTACT Jintao Lu [email protected]

ß 2020 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/
licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is
properly cited.
1622 J. LU ET AL.

compared to the other studies that are investigating the impact

of CSR on competitiveness via moderation and mediation analysis.
The main approach followed in this paper is the qualitative
assessment that has several limitations and advantages.

1. Introduction
The society’s needs, attitudes and values, which are constantly changing, have been
influencing discussions about sustainable development at national and international
levels. Sustainable development is perceived as the satisfying of contemporary soci-
ety’s needs without influencing or preventing the satisfaction of future generation’s
needs (Kolk, 2016). In order to implement this idea of sustainable development, the
target to adapted activities towards sustainable development is set for every state busi-
ness and its implemented activities (Lu et al., 2019a). Even though the concept of
integrating business into sustainable development has been discussed since the middle
of the past century, it was announced publicly about guiding companies towards sus-
tainable development in 1999, i.e., after the Global Compact (Kell, 2005). This agree-
ment aimed at encouraging business to draw attention to human rights, workforce,
environmental protection and anti-corruption fight. It resembled an international cor-
porate social responsibility initiative (Coulmont et al., 2017).
Corporate Social Responsibility (CSR) has been discussed in scientific works and is
becoming an inseparable phenomenon of modern XXIst century business activities as
well. Those times, when business activities were only based on achieving profitability
and performance efficiency, regardless of creating social welfare and solving environ-
mental problems, such as environmental change, air pollution etc., are already forgot-
ten, because a contemporary business cannot ignore modern consumers’ needs. These
needs state that it is vital and appropriate for business companies and organisations
to base their activities on socially responsible actions, regarding social, ecological and
ethical (moral) aspects (Aguinis, Glavas, 2012).
It is currently appropriate for a company to integrate the areas of social responsi-
bility into its activities. In the contemporary society, which is increasingly reviewing
the concept of sustainable development, the idea of socially responsible business is as
important as the products or services provided by the company (Eccles et al., 2012).
A business that aims to remain competitive at local and international level has to be
socially responsible. Many scholars (Abbas et al., 2018; Eshra, Beshir, 2017; Li et al.,
2019; Mandhachitara, Poolthong, 2011; Mei-Lien, 2011; Moisescu, 2017; Nochai,
€
Nochai, 2014; Oberseder et al., 2013, 2014; Stanisavljevic, 2018; Yuen et al., 2016)
have stated in their studies that consumers are the main factor encouraging compa-
nies to implement activities related to social responsibility. Other scholars have high-
lighted the impact of state policies and institutions as important drivers of CSR
initiatives (Doh et al., 2015; Garcia-Sanchez, 2016; Ioannou, Serafeim, 2012; Lu et al.,
2019c). After gaining the understanding of what encourages companies to be socially
responsible, it is appropriate to explore what influence does corporate social responsi-
bility has on the company’s competitiveness, which is the main challenge for
 ECONOMIC RESEARCH-EKONOMSKA ISTRAŽIVANJA 1623

companies in a modern dynamic world. Competitiveness is the ability to provide

products and services as/or more effectively and efficiently than the relevant competi-
tors (Jishi et al., 2017; Dupire, M’Zali, 2018).
There are just several studies dealing with the impact of CSR on firm competitive-
ness (Anser et al., 2018; Hadj, 2020; Marin et al., 2017; Snircova et al., 2016; Tantalo
et al., 2014; Vilanova et al., 2009; Zait et al., 2015; Zhao et al., 2019). Most studies
were focused on the impact of CSR on the performance of the firm (Kaufman, Olaru,
2012; Lee, Maxfield, 2015; Price, Sun, 2017; Lee, Kim, 2017; Li et al., 2018), the value
of the firm and its brand ( Melo, Galan, 2011; Servaes, Tamayo, 2013; Cahan et al.,
2016; El Ghoul et al., 2017; Park et al., 2018; Lu et al., 2019b ) or the profit of the
firm (Maneet, Sudhir, 2011; Hategan et al., 2018; Yoo, Lee, 2018). However, the com-
petitiveness is a much broader approach which has attracted a great deal of attention
from scholars in the fields of international business and industrial economics
(Madueno et al., 2014; Ioannou, Serafeim, 2012; Engert, Baumgartner, 2016; Snircova
et al., 2016); whereas, company competitiveness that is achieved by sustainable activ-
ity ensures long-term competitiveness.
All studies (Anser et al., 2018; Hadj, 2020; Marin et al., 2017; Snircova et al., 2016;
Zhao et al., 2019), except (Tantalo et al., 2014; Vilanova et al., 2009; Zait et al., 2015),
were dealing with the analysis of linkages between Corporate Social Responsibility
and competitiveness via moderation and mediation analysis. Vilanova et al. (2009)
and Zait et al. (2015) developed accurate hypotheses about the impacts of CSR on
competitiveness, and the study by Tantalo et al. (2014) applied qualitative assessment
framework for the assessment of aforementioned linkages. Nevertheless, a clear
framework for business in linking CSR with firm competitiveness has not been pro-
vided yet, mainly due to complicated structural equations and dozens of hypotheses
that appeared in previous studies.
This study aims to fill this gap and analyses the influence of CSR on corporate
competitiveness by applying a simple and clear framework based on the qualitative
assessment. The employed questionnaire involved Likert scale, which helped to evalu-
ate the impact of social responsibility on the organisation’s separate elements of com-
petitiveness by calculating coefficients of specific indicators. This study has
limitations and represents just a small step in the process trying to explain a complex
model of possible relationships between CSR and competitiveness. As in any qualita-
tive study, these limitations are clearly addressed in the Methodology section.
The conducted empirical research provides that separate social responsibility
dimensions (environmental, social, economic, shareholder, voluntariness) affect separ-
ate elements of competitiveness: financial capacity, quality of production, satisfied
needs of consumers, efficiency, introduction of innovations and company’s image, dif-
ferently. This study has implications for the managers of the company and is useful
for developing business strategy, as it provides a clear understanding, which dimen-
sions of CSR followed by a company effect the targeted area of competitive advan-
tages of the company.
The study is structured in the following way: the first section is introduction; the
second presents the literature review; the third section develops a model for the rela-
tionship between corporate social responsibility and firm competitiveness; the fourth
1624 J. LU ET AL.

section deals with the results of empirical study; the fifth section presents a discussion
of results; the sixth section concludes the research.

2. Literature review
2.1. Corporate social responsibility
Corporate social responsibility as a new phenomenon in business activities started in
about 1950s (Campbell, 2007; Carroll, 2008; Krisnawati et al., 2014; Riera, Iborra,
2017). The main global CSR initiative Global Compact was presented by the UN in
1999, integrating ten universal principles that include the areas of human and labour
rights, environment and anti-corruption (Coulmont et al., 2017). This agreement
seeks that all business companies would contribute to sustainable development, i.e.,
would reduce pollution through technological innovation and decrease the number of
equipment that would cause pollution in the organisation. An active fight against cor-
ruption is discussed as well, aiming to repeal illegal, shadow business, bribery and
corruption (Epstein, Buhovac, 2014; Meyer, 2015).
M. Vilanova (2007) determines the main aspects of CSR activities: community rela-
tions, workplace, accountability (transparency), vision and marketplace. Community
relations are related to the partnership with different stakeholders (clients, suppliers,
employees and partners) and company’s philanthropic activities; workplace includes
labour practices within the organisation and the assurance of human rights; account-
ability relates to organisation’s transparency, various financial reporting, responsibility
to society and other stakeholders; vision includes values, reputation and image from
the perspective of stakeholders; marketplace is concerned with the main business
activities (pricing, marketing, honest competitiveness and investments). Whereas
other authors (Fouad Ibrahim, 2017; Eshra, Beshir, 2017; Nochai, Nochai, 2014) claim
that corporate social responsibility is related to four aspects of activities, i.e., eco-
nomic, legal, ethical (moral) and philanthropic responsibilities.
According to Fouad Ibrahim (2017), the most important is economic responsibil-
ity, followed by legal, ethical (moral) and philanthropic responsibility. Economic
responsibility is the most important aspect because no business organisation could
exist without the aim to reach profit and satisfy market needs. Legal responsibility is
significant as well, because a business that does not follow the regulations and rules
should be punished by the law; moreover, when a company disregards the aspect of
transparent business, it causes harm to its reputation and image, which can reduce
consumer interest in its sold goods or provided services (Garcia-Sanchez et al., 2016,
2018). In the third place, according to the significance, ethical (moral) responsibility
requires firms to respect generally recognised standards and moral norms. The final,
according to the significance, is philanthropic responsibility that does not directly
influence the company’s economic results, but it can have a positive impact on the
society’s attitude towards the organization and improve its image, prestige and repu-
tation. It could be stated that all these four aspects of social responsibility directly or
indirectly contribute to the improvement of the company’s activities, create consumer
opinion about the company and influence the results of activities of a socially respon-
sible organization (Godos-Dıez et al., 2018; Kong et al., 2020; Ljubojevic et al., 2012).
 ECONOMIC RESEARCH-EKONOMSKA ISTRAŽIVANJA 1625

Table 1. The main dimensions of corporate social responsibility.

Aspects
Social Economic Ecological
Taking care of society’s needs; Profitability assurance; Knowledge and compliance with
Taking care of employee wellbeing; Assurance of competitiveness of environmental legislation;
Encouragement of cooperation; goods and services; Knowledge of positive and negative
Assurance of work safety; Risk management; impact on the environment;
Possibilities for employee Energy saving; Ecological risk management;
development; Management efficiency; Reduction of pollution;
Involvement in decision-makin Productivity assurance. Monitoring and compliance of
nature-friendly indicators.
Source: created by the authors based on (Castka et al., 2007; Jankalova, 2016, 2017; Pimentel et al., 2016; Lee et al.,
2017; Litfin et al., 2017).

R. Nochai and Nochai (2014) and Eshra and Beshir (2017) agree with N. A. Fouad
Ibrahim (2017) and as well distinguish four aspects of corporate social responsibility:
economic, legal, ethical (moral) and philanthropic responsibilities. When analysing
these aspects, R. Nochai and Nochai (2014) state that the essence of economic
responsibility is the reduction of expenditures and costs, aiming to increase profit;
legal responsibility stresses absolute respect for legislation regulations while perform-
ing activities; ethical (moral) responsibility means that business organizations would
operate under justice law and would not cause a threat to society’s interests. Other
authors (Baumgartner, 2014;; Schmeltz, 2017) as well stress that philanthropic respon-
sibility distinguishes company’s voluntariness, contributing to the creation of society’s
welfare by encouraging culture, art and other intellectual activity that is necessary to
ensure society’s development.
Other authors, contrary to Fouad Ibrahim (2017), additionally name ecological and
social aspects, but do not distinguish philanthropic, legal or ethical (moral) aspects.
The only similarity is that the mentioned authors distinguish economic aspect that
integrates performance efficiency and profitability assurance, competitiveness of goods
and services, work efficiency and energy saving by trying to reduce cost of activities.
It could be noticed that the distinguished ecological and social aspects could reflect
the legal aspect named by Fouad Ibrahim (2017), because it includes compliance with
legislation related to environmental protection and employee safety. It should be
stated as well that the social aspect can be partially related to ethical (moral) aspects,
because it discusses taking care of society’s needs and employee wellbeing (Lombart,
Louis, 2014; Kim, Park, 2011). Thus, when analysing the main activity aspects of cor-
porate social responsibility, it has been found that all elements are interrelated, and
when combining them, an optimal implementation of activities of corporate social
responsibility could be achieved
Moreover, it is important to mention that social responsibility is based on three
main dimensions: social, economic and ecological (Castka et al., 2007; Jankalova,
2016, 2017; Pimentel et al., 2016), see Table 1.
According to A. Dahlsrud (2008), corporate social responsibility integrates the fol-
lowing dimensions: environmental, social, economic, shareholders (suppliers, employ-
ees, consumers and society) and voluntariness. Environmental dimension is oriented
1626 J. LU ET AL.

towards the environmental company’s policy that assures cleaner environment, sus-
tainable use of resources and raw materials in activities and solves other problems
related to nature. The social dimension is linked to the mutual cooperation and
achieving a compromise between business organisation and society’s needs, solving
the existing social problems. The economic dimension discusses how to ensure long-
term profitability of activities (Joshi et al., 2007; Kaufmann, Olaru, 2012), at the same
time contributing to the world’s sustainable economic development, cleaner environ-
ment, integration with society and philanthropic activities that are not regulated by
the legislative framework. The stakeholder dimension stresses that a company, which
is implementing socially responsible activities, regards the interests of stakeholder
groups and respects the interests of employees, suppliers, clients and partners (Castka
et al., 2007; Doh et al., 2015). The dimension of voluntariness represents philan-
thropic activities, i.e., when a company voluntarily participates in charitable activities
without compulsion.
After analysing the elements and dimensions of corporate social responsibility that
have been distinguished by different authors, it has been noticed that some authors
emphasize different aspects. In the table below (see Table 2), a comparison of ele-
ments and dimensions of corporate social responsibility that were analysed by differ-
ent authors is provided.
When analysing the main elements of corporate social responsibility, it has been
found that all these elements involve employees as well as consumers and society.
According to Liu et al. (2012), the interest groups related to social responsibility can
be classified in details (see Table 3).
As it is presupposed by the provided information above in Table 3, there are quite
a lot of factors that have influence on socially responsible companies. First of all, a
socially responsible company draws attention to its environment, i.e., workers and
stakeholders; it is such a company that takes care of employee welfare and ensures to
save working environment that employee wages would be competitive and correspond
to the norms imposed by the laws (Engert, Baumgartner, 2016). From the stakehold-
er’s perspective, a company plans to share the net profit with stakeholders that have
invested in the company’s activities. Creditors are as well important for the company.
If a company has creditor obligations, it must pay and cover them in due time, with-
out delay, because it can have an influence on the company’s image and future per-
spectives. Suppliers are no less important. Without suppliers, a company could not
produce necessary goods or provide services. Thus, a socially responsible company is
bound to observe contractual terms and transparently pursue its activities (Dubee,
Rugiero, 2008). When discussing consumers, it is important to mention that they cre-
ate company’s income; thus, it is appropriate for a company to provide qualitative
services and sell qualitative goods in order to form a positive impression of consumer
shopping patterns. Moreover, the most important factor of socially responsible com-
pany is environmental effect. Most scientists determine that a socially responsible
company takes into consideration the surrounding environment (Cahan et al., 2016;
Maimunah, 2009; Vasi, King, 2012). A business that is controlling the effect of its
implemented activities on the environment and encouraging sustainable use of
resources contributes to the tendency of sustainable development of the society. Some
 ECONOMIC RESEARCH-EKONOMSKA ISTRAŽIVANJA 1627

Table 2. Comparison of corporate social responsibility dimensions in different studies.

Studies
Castka et al. (2007);
Doh et al. (2015);
Jankalova (2016, Nochai and Nochai
Vilanova (2007); Zait 2017); Pimentel (2014);
et al. (2015); et al. (2016); Joshi Fouad Ibrahim
Addressed CSR issues Snircova et al. (2016) et al. (2007) Dahlsrud (2008) (2017)
Vision of the company ETHICAL ACTIVITIES ECONOMIC ASPECT: STAKEHOLDER ETHICAL
energy saving DIMENSION: RESPONSIBILITY;
INTERACTION PHILANTHROPIC
WITH SOCIETY RESPONSIBILITY
Values and ECOLOGICAL ENVIRONMENTAL
reputation, image ASPECT: DIMENSION;
in the society knowledge of VOLUNTARINESS
positive/negative DIMENSION
impact on the
environment
Workplace Company’s rules SOCIAL ASPECT: STAKEHOLDER ETHICAL
of procedures employee DIMENSION: RESPONSIBILITY
involvement in cooperation
decision-making with employees
Human rights SOCIAL ASPECT:
assurance of
work safety
Working atmosphere SOCIAL ASPECT:
employee
improvement
possibilities,
taking care of
employee welfare
Responsibility RESPONSIBILITY to ECOLOGICAL LEGAL
society’s interests ASPECT: RESPONSIBILITY:
ecological risk acts following
management, legal system
reduction
of pollution
Reports related to ECOLOGICAL
the ASPECT: monitoring
company’s and compliance of
activities nature-
Transparent activities friendly indicators
Market Related to the main ECONOMIC ASPET: ECONOMIC ECONOMIC
activities of the assurance of DIMENSION: RESPONSIBILITY:
company profitability, assure reduction of
(marketing, assurance of profitability, operational costs
pricing, honest competitiveness contribution to
competitiveness, of goods/services, economic
innovations) risk management development
Society relations Philanthropy SOCIAL ASPECT:
PHILANTHROPIC: PHILANTHROPIC
taking care of activities based RESPONSIBILITY
society’s needs, on business
encouraging ethics,
cooperation
voluntariness,
activities that are
not imposed by the
legislative
framework
Partnership with SOCIAL DIMENSION:
stakeholders relation between
business
and society
Source: created by the authors.
1628 J. LU ET AL.

Table 3. Interest groups of corporate social responsibility.

Interest groups Factors/indicators
Workers Work safety; working hours; wage; equality of workers; career development
Shareholders Return on investments; dividends; disclosure of information
Creditors Solvency; credit status
Consumers Quality of goods or services; customer satisfaction
Suppliers Compliance with agreements; fair trade
Society Enhancing access to employment; responsibility for communities
Government Paying taxes; social input
Environment Use of resources; environmental protection
Source: composed by the authors based on Liu et al. (2012).

authors (Maldonado-Guzman et al., 2017; Romani et al., 2016; Uddin et al., 2011;
Vlachos et al., 2009), when analysing corporate social responsibility, claim that inter-
est groups of socially responsible business organisations create certain benefits for a
company that is related to the organisation’s interest groups.
If a company bases its activities on the aspects of social responsibility, a trust
related to consumers is created (Moisescu, 2015, 2017). Corporate social responsibility
creates a loyal customer base: when customers are making a decision to buy goods or
services, they notice whether a company respects own as well as society’s interests to
create safe, clean and justice-based aspects of a community. Moreover, corporate
social responsibility provides benefits related to the company’s staff. If a company is
socially responsible, the employees start to show more respect related to work motiv-
ation as well as loyalty to the organisation (Udin et al., 2011). Suppliers as well take
notice of corporate social responsibility. Naturally and understandably, a company
that bases its activities on the concept of social responsibility aims to cooperate and
establish partnerships with organisations that are as well respecting society’s needs in
order not to damage reputation; in fact, on the contrary, they aim to create a network
of socially responsible companies for sharing common ideas and achieving desired
results. Corporate social responsibility as well creates benefits related to shareholders.
For a socially responsible company, it is easier to meet the set standards and require-
ments, participate, for example, in public procurement, win contracts and in this way
satisfy the needs and expectations of shareholders, persons that invest in a company.

2.2. Firm competitiveness

When analysing the understanding of company’s competitiveness, it has been noticed
that company’s competitiveness is determined by such activity aspects as financial
capacity, human and technological resources, innovations, operational efficiency,
quality of goods/services and customer satisfaction (Hong et al., 2010). The financial
capacity provides an opportunity for a company to be independent from creditors
and allows strengthening technological capacity, introducing innovations, strengthen-
ing brand and at the same time taking a strong position in a competitive market.
Human resources are as well an important element in the spectrum of competitive
aspects (Maimunah, 2009). Competitive workers provide for a company such benefits
as an opportunity to implement advanced technologies and modern projects by suc-
cessfully pursuing long-term company’s strategy. Whereas technological resources and
innovations allow firms to lessen operational costs and prices of products and allow
 ECONOMIC RESEARCH-EKONOMSKA ISTRAŽIVANJA 1629

more sustainable use of resources, contributing to solving environmental problems

(Markota, Vukic, 2015). Another element that is influencing competitiveness is the
quality of goods/services, which can ensure the loyalty of clients, consumers and the
creation of a positive business image and a good reputation (Mei-Lien, 2011). It could
be stated that the satisfaction of consumers as well as the quality of goods/services
form loyal customer base and contribute to the creation of a wider consumer segment
(Mandhachitara, Poolthong, 2011). It could be stated that all these activity elements
that are causing business competitiveness help organisations to create and develop
their competitive advantage and company’s immunity that is necessary when adapting
in narrow market or surviving and strengthening positions in the present mar-
ket segment.
The competitiveness is starting to be understood as the organisation’s ability to dif-
fer from competing companies with its implemented sustainable activity and transi-
tioning from one target, i.e., from own profit, to the satisfaction of needs of the
organisation as well as the environment that is surrounding it (Ioannou, Serafeim,
2012; Engert, Baumgartner, 2016). According to J. Snircova et al. (2016), corporate
competitiveness that is achieved by sustainable activities ensures long-term competi-
tive advantage that cannot be easily repeated by the competitive companies in the
market. This could be explained by a modern, contemporary business organisation
that is corresponding to the sustainable development concept. This organisation
regards ecologic, economic and social environments and creates a loyal customer
base, because society becomes more conscious and understands that the governments
of countries as well as business subjects operating in countries have to turn to the
natural environment and aim to foster, save it and in such a way contribute to the
world’s sustainable economic development. Thus, it has been noticed that the appear-
ance of a sustainable society and further development encourages companies to
change their attitude towards competition by integrating social, economic as well as
the ecological elements in their activities to create not only short-term, but long-term
organisational competitive advantage that is based on the added value that is created
for the market by a socially responsible and sustainable company; this advantage can-
not be easily repeated by other competing companies and is related to the regard of
changing needs of society and consumption patterns (Ioannou, Serafeim, 2012;
Engert, Baumgartner, 2016). It is as well important to mention that when a business
organisation is developing and aiming for long-term competitiveness that is based on
social responsibility and sustainable development, the previously discussed interest
groups of the company should be regarded, i.e., workers, shareholders, creditors, con-
sumers, suppliers, society and government, in order to retain all interests.
When analysing what issues of competitiveness are linked to corporate social
responsibility, it has been found (see Table 4) that corporate social responsibility
influences company’s reputation, brand, financial capacity, loyalty of consumers and
attracting highly-qualified workers (Ljubojevic et al., 2012; Maneet, Sudhir, 2011;
Minkiewicz et al., 2011). Whereas Madueno et al. (2016) argue that corporate social
responsibility influences the following elements of firm activity: reputation, consumer
loyalty, attracting highly-qualified workers, market share, work efficiency and con-
sumer satisfaction. According to Battaglia et al. (2014), the specificity of the product,
1630 J. LU ET AL.

Table 4. Links between corporate social responsibility and competitiveness.

Authors Ljubojevic et al., 2012;
Influence of social Maneet, Sudhir, 2011;
responsibility Minkiewicz et al., 2011 Madueno et al., 2016 Battaglia et al., 2014
Reputation 1 þ
Strengthening of the brand 1
Financial capacity 1
Specificity of the product þ
Consumer loyalty 1 þ
Highly-competent workers 1 þ þ
Market share þ þ
Work efficiency þ þ
Consumer satisfaction þ þ
Cost reduction þ
Risk reduction þ
Source: created by the authors.

attracting highly-qualified workers, market share, work efficiency, consumer satisfac-

tion, cost reduction as well as risk reduction are influenced.
When discussing reputation, it could be stated that a company that is working in a
socially responsible way improves its reputation and image in respect to consumers
as well as all previously mentioned interest groups, and a positive reputation, in turn,
influences the strengthening of the brand. Socially responsible company appears more
prestigious in respect of stakeholder groups and creates a picture of a transparent
business, which strengthens the brand. Strong brand, as it is stated by Battaglia et al.
(2014), provides an opportunity for a company to develop occupied market share and
penetrate into new markets, because in certain markets, green products are demanded
and are more attractive to the consumers (Romani et al., 2016). The green products
that are created by a company form loyal consumer base and their satisfaction,
because when using production of a socially responsible company, consumers con-
sciously contribute to solving environmental problems. When discussing the attrac-
tion of highly-competent workers, it could be stated that this aspect is partially
related to the company’s positive reputation and strong brand, because for an organ-
isation that is characterised by a strong brand it is frequently easier to attract highly-
competent workers, as workers strive for such a company. The reduction of cost and
risk is related to investments used in the activities of a socially responsible company
that are technologically advanced and, in turn, influence the reduction of costs that
are employed in the production processes.

3. Model for addressing the relationship between corporate social

responsibility and competitiveness
Following the analysis of understandings of corporate social responsibility and com-
petitiveness and how corporate social responsibility influences certain activity aspects
as well as competitiveness of firms, a model has been created to reflect how corporate
social responsibility and competitiveness correlate with each other (see Figure 1).
The model shows how socially responsible activities that are implemented by com-
panies influence competitiveness and through which company’s activity perspectives
it is achieved. As it has been noticed, when analysing various concepts, dimensions
 ECONOMIC RESEARCH-EKONOMSKA ISTRAŽIVANJA 1631

Figure 1. Model for relations between corporate social responsibility and competitiveness.

and aspects of social responsibility, it can be noticed that it is a complex phenom-

enon composed of several different dimensions and elements; thus, this model begins
by classifying social responsibility dimensions into two broad groups, i.e., a group of
core dimensions discussed in (Castka et al., 2007; Jankalova, 2016, 2017; Pimentel
et al., 2016) and a group of additional dimensions discussed in (Vilanova, 2007;
Dahlsrud, 2008; Fouad Ibrahim, 2017; Nochai, Nochai, 2014). It could be stated that
the core and initial dimensions of corporate social responsibility are environmental,
social and economic dimensions. However, besides the mentioned core dimensions of
corporate social responsibility, there are distinguished additional dimensions, i.e.,
shareholder and voluntariness. Different authors name these dimensions differently:
shareholder dimension–dimension of community relations, ethical responsibility
vision; voluntariness dimension – philanthropic responsibility.
When analysing the first environmental dimension, it has been noticed that it is
related to corporate responsibility, which obliges companies to follow the require-
ments of environmental protection regulations. At the same time, corporate responsi-
bility encourages managers to develop environmental policy in the organisation,
avoid ecological risk related to the process of goods/services production/provision,
aiming at minimizing the damage to the environment that is created by a company
1632 J. LU ET AL.

to prefer environmentally friendly technologies, pollution reduction and prevention.

The second dimension is the social dimension that primarily relates to the relation-
ships in a community, in other words, the relation between business organisations
and its surrounding society. The social dimension could be related to the shareholder
dimension because it stresses the relationship between the business and its surround-
ing environment. First, social dimension encourages business to cooperate with soci-
ety. Business in this modern society that is becoming more conscious is no longer a
single entity that is concerned with reaching the only aim, i.e., profit, and separated
from the other person’s needs. Business organisations aim to adapt in a society with
constantly changing consumers’ needs, based on socially responsible activities, such as
attention to society’s needs, employee welfare, cooperation, work safety, healthy envir-
onment assurance for workers, continuous staff training, involvement in decision-
making, business effect on society analysis, involvement of certain social problems in
business activity processes and becoming part of the society. Another core dimension
is economic dimension; it is named in theory as the economic responsibility that
could be described as the organisation’s aim to maximise the profit, to sell goods or
provide services and at the same time satisfy market needs. It is aimed at increasing
work efficiency, respecting the right of workers, reducing costs, installing new,
innovative clean technologies, financial risk management, profitability assurance and
in this way contributing to raising the level of world economy.
The shareholder dimension in this model (see Figure 1) addressed the benefits of
corporate social responsibility (Uddin et al., 2011). Shareholders are consumers,
employees, suppliers and stockholders. If a company is based on the principles of
social responsibility, then trust, which is related to consumers, is created. Corporate
social responsibility creates a loyal customer base: when making a decision to buy
goods or services, they notice whether a company respects own as well as society’s
interests to create safe, clean and justice community needs. Moreover, corporate
social responsibility provides benefits related to the company’s staff. If a company is
socially responsible, employees start to show more respect related to work motivation
as well as loyalty to the organisation. Suppliers as well take notice of corporate social
responsibility. Naturally, a company that bases its activities on the concept of social
responsibility aims to cooperate and establish partnerships with organisations that are
as well respecting society’s needs in order not to damage reputation, but on the con-
trary, to create a network of socially responsible companies for sharing common ideas
and achieving desired results. Corporate social responsibility as well creates benefits
related to shareholders. For a socially responsible company, it is easier to meet the set
standards and requirements, participate, for example, in public procurement, win
contracts and in this way satisfy the needs and expectations of shareholders.
Voluntariness dimension that could be called philanthropic responsibility accentuates
voluntary desire to participate in philanthropic activities by a socially responsible
company. The latter is related to the aspect of vision, when philanthropic activities
contribute to the respect of ethical norms, formation of a company’s image, reputa-
tion. From society’s perspective, the creation of society’s welfare, participation in
charitable activities by encouraging culture, art, uphold traditions and appearance, in
the eyes of society, are seen as ethical, conscious and responsible organisation that
 ECONOMIC RESEARCH-EKONOMSKA ISTRAŽIVANJA 1633

takes care of own as well as other persons’ interests. To summarise the model for
relations between corporate social responsibility and competitiveness, it could be
stated that when consistently following the combination of all these social responsibil-
ity dimensions, competitive advantage is ensured in the market.

4. Empirical analysis of the impact of corporate social responsibility on

firm competitiveness
Based on the developed model for addressing the relationship between corporate
social responsibility and competitiveness, there was conducted an empirical research
about the influence of different social responsibility dimensions (environmental,
social, economic, shareholder and voluntariness) on separate elements of competitive-
ness (financial capacity, quality of production, satisfied needs of the consumers, effi-
ciency and introduction of innovations and company’s image).
The survey of 33 firms, all companies of Global Compact network members in
Lithuania, was conducted in September 2019. The main approach followed in this
paper is a qualitative assessment. It represents just a small step to explain a complex
model of possible relationships. As in any qualitative study, limitations need to be con-
sidered. First, the sample is limited to Lithuanian companies that are Global Compact
members. Second, the generalisability may only be accurate when comparing compa-
nies in similar cultural institutional environments. The subjectivity is an important
limitation as well. The main advantage of the followed approach is simplicity and
transparency of links between dimensions of CSR and competitiveness. The future
research is necessary to expand the sample of data, cover more countries and the appli-
cation of more rigorous frameworks and tools like Structural Equation Modelling,
regression analysis etc. The Structural Equation Modelling allows analysing the relation-
ship between CSR and competitiveness more deeply and addressing the mediating role
of innovation between CSR and competitiveness and moderators of this relationship.
The questionnaires were sent to companies via email, and the link of online ques-
tionnaire was provided as well. The responses were obtained from all 33 companies.
The employed questionnaire involved Likert scale, which helped to evaluate the impact
of social responsibility on the organisation’s separate elements of competitiveness by cal-
culating coefficients of indicators (Bleich et al., 2015; Heale, Twycross, 2015). The scores
from 1 to 4 were applied in assessing the influence of CSR on firms’ competitiveness: 1
there is no impact, 2 insignificant impact, 3 moderate impact, 4 high impact.
The answers were formalized by applying 4 unipolar grade scale (0; 0.25; 0.5; 1) to
define the impact by using K coefficient.
The following formula was applied for calculating the impact assessment coeffi-
cients:

X
N
kj ni
Ki ¼
j¼1
n

Ki is the coefficient of impact of selected CSR dimension on the ist element of

competitiveness; kj is the score of impact on the ist element of competitiveness; j is
1634 J. LU ET AL.

Table 5. The influence of corporate social responsibility dimensions on separate elements of com-
petitiveness (based on the impact coefficients).
Environmental Social Economic Shareholder Philanthropic
Financial capacity 0.247 0.140 0.264 0.253 0.123
Quality of production 0.173 0.153 0.183 0.263 0.110
Satisfied needs of consumers 0.267 0.267 0.223 0.320 0.160
Productivity, work efficiency 0.220 0.203 0.220 0.317 0.127
Possibilities for introduction of innovations 0.253 0.180 0.197 0.273 0.120
Image, reputation 0.353 0.350 0.313 0.340 0.340
Source: created by the authors.

the score from 1 to 5 (N ¼ 5); ni is the number of answers that selected the score j
for competitiveness element-i; n is the total number of answers.
The assessments of impact of separate social responsibility dimensions (environ-
mental, social, economic, shareholder and voluntariness) on separate elements of
competitiveness (financial capacity, quality of production, satisfied needs of consum-
ers, efficiency, introduction of innovations and company’s image) are provided in
Appendix 1. The generalized results are given in Table 5.
According to the generalized results provided in Table 5, it has been noticed that
all social responsibility dimensions (environmental, social, economic shareholder,
philanthropic voluntariness) mostly influence company’s image and reputation. When
analysing environmental corporate social responsibility dimension, which is oriented
towards sustainable innovations, energy-saving policy, participation in solving envir-
onmental problems, it has been found that from all researched elements of competi-
tiveness, this dimension mostly influences image, reputation, secondly, satisfied needs
and expectations of consumers, thirdly, financial capacity. Whereas, the least influ-
enced element of competitiveness is the quality of production. It could be stated that
the environmental dimension influences company’s image. If an organisation clearly
understands the environmental problems, applying sustainable, clean and environ-
mentally-friendly technologies in its activities, it will aim to minimise pollution
caused to the environment and appear as a mature business subject in the society.
This subject aims to achieve not only one task, i.e., gain profit, but to adapt in this
global society, where environmental, global problems are relevant and a priority to
most countries. This is related to the satisfied needs of consumers, because consumers
are becoming more conscious. According to Romani et al. (2016), in the market,
there is appearing “green consumption” that is related to the aim of protecting nature
as well as “responsible consumption” that integrates avoiding environmental damage
and encompasses “green consumption”, “sustainable consumption” (preservation of
resources) and “rational consumption” (minimum quantity of consumption).
Apart from the environmental aspect, consumers think about other areas of social
responsibility: human rights, ethics, etc. When discussing financial capacity, it could
be stated that environmental policy of a company encourages reducing expenditure
and costs because of clean technologies used in activities. It is important to mention
that a company that is operating under environmental standards gains “good name”
from the perspective of some institutions, and this helps to participate in the public
tenders published by the public authorities. Social dimension related to partnership
with local organisations (schools, universities, centres for disables or retired persons,
 ECONOMIC RESEARCH-EKONOMSKA ISTRAŽIVANJA 1635

etc.), participation in public activities and solution of social problems as well as envir-
onmental and all other dimensions mostly influence organisation’s image and reputa-
tion, secondly, satisfies the needs of consumers, thirdly, improves productivity and
work efficiency of the company. The least influenced is financial capacity, as it has
been noticed in this study. According to Price and Sun (2017), one of the main fea-
tures of a modern organisation is the organisation’s ability to be “a society that is
integrating and adapting relationship between a person and society and solving prob-
lems which are arising between them”. This creates an organisation that encourages
social protection. A company that actively participates in the community’s life
appears as a caring member of a society from the perspective of consumers and
potential customers understanding that most of the company workers are members
of local community, and this encourages taking care of community’s health, safety,
education and more. The participation in public activities, solving social problems
and partnership with local institutions initiate dynamic, innovative decisions that
enable changes in the society and continuous implementation of sustainable develop-
ment. It could be stated that this affects company’s productivity and work efficiency,
because the mentioned favourable environment leads to having modern, creative,
innovative workers.
Another, i.e., economic, dimension found in this study is related to the perform-
ance accountability, reduction of costs and fair competition. Economic dimension is
mostly related to the created company’s image, secondly, financial capacity, thirdly,
satisfied needs of consumers. It could be stated that performance accountability is as
a tool helping companies to reveal their best aspects of activities, which understand-
ably affects consumer and improves company’s reputation in respect to clients as well
as society, suppliers, stakeholders, partners and public authorities. Due to this reason,
economic dimension of social responsibility influences the financial capacity as well,
because the existing and potential stakeholder reacts and takes into account transpar-
ent activities of the organisation, where they invest funds. Stakeholders, including
partners and suppliers, when making a decision to cooperate with a company, firstly,
will consider the perspective of a long-term cooperation, because short-term cooper-
ation will provide only short-term benefit, and long-term partnership will form loyal
relations ensuring a stable future and lead to uniting forces to achieve common goals.
A company that guarantees transparency of its activities does not hide or avoid tax
compliance. It does not ensure a short and quick result but rather a long-term activ-
ities perspective that is as well encouraged by the conscious consumers who take care
of their own as well as future generation’s position and clearly understand the dam-
age caused to the whole community, country and region by unfair and
shadow activities.
The shareholder dimension is mostly related to the organisation’s image, satisfied
needs of consumers in the second place and productivity and work efficiency in the
third place. As it is stated by Vasi and Kin (2012), the concept of corporate social
responsibility indicates one of the important aspects: the behaviour with internal and
external shareholders is revealed. The satisfaction of shareholders’ needs causes coun-
tries to trust organisations, and in turn, trust influences company’s reputation, satis-
fied needs of consumers, work efficiency related to loyal and motivated staff that is
1636 J. LU ET AL.

open to novelties and innovative solutions providing long-term benefit. Despite every-
thing, corporate social responsibility would become merely theoretical insights and
considerations described in textbooks and not a real aspect of the company’s activ-
ities. The satisfaction of shareholders’ needs, taking care of them reveal organisation’s
maturity, because only an organisation that has achieved a certain level of maturity
understands that by operating in the market, it is surrounded by suppliers, clients,
partners and community. Thus, for an organisation, it is appropriate to consider the
needs of interested parties, their evaluation and certain related decision making;
otherwise, a company will not be able to remain in the market with strong market
players, as it does not create “trust network”.
It could be stated that from all corporate social responsibility dimensions, philan-
thropic dimension enables the aspect of voluntariness. After completing this study, it
has been found that the support for projects solving social problems is one of the
most common measures applied in socially responsible companies. Voluntariness or
philanthropic dimension is mostly related to a company’s reputation, satisfied needs
of consumers in the second place, productivity and work efficiency in the third place.
Companies that contribute to various projects solving social problems that are of
great importance for the society (for example, social inequality, poverty, etc.) are gen-
erally accepted by the society. From the society’s perspective, they seem as an organ-
isation characterised by socially responsible activities, taking care of sensitive social
issues. In this way, company’s image is improved in society’s perspective. However,
when discussing company’s philanthropic activities, the lack of information plays an
important role. Therefore, public education, education/training, special workshops
and consultations could be helpful (Kudlak et al., 2018). These instruments would
help to educate conscious society that is aware of socially responsible businesses,
which in turn, would encourage business to present, demonstrate positive examples
of corporate social responsibility and create a snowball effect. Thus, public demon-
stration of role models is very important. The input of the public sector would be
appropriate as well, when public sector will start to demonstrate examples of socially
responsible activities (recycling, support for struggling employees, etc.), this will
become an incentive for the private business sector to take action for the application
of corporate social responsibility in activities (Visionary Analytics, 2015). Thus, this is
a purposeful joining of forces of public and private business sectors, related to the
promotion and public demonstration of corporate social responsibility.

4. Discussion
This paper applied qualitative assessment framework in order to get clearer and sim-
pler representation of the impact of specific dimensions of CSR on the most import-
ant areas of competitiveness. The results that have been obtained in this study are in
good agreement with other studies conducted in this area, but it has applied a differ-
ent approach. Qualitative studies (Kong et al., 2020; Tnatalo et al., 2014; Vilanova
et al., 2009; Zait et al., 2015) did not try to distinguish between different dimensions
of CSR and specific components of competitiveness; however, their findings were
supported by this study. For example, study by Zait et al. (2015), based on literature
 ECONOMIC RESEARCH-EKONOMSKA ISTRAŽIVANJA 1637

review and interviews, developed hypotheses about the impacts of CSR on competi-
tiveness in Romanian SMEs and found that this relation is not clear and not fully rec-
ognized by the company managers. Vilanova et al. (2009) conducted a literature
review and found that CSR and competitiveness relate through learning and innov-
ation cycle, where corporate values, policies and practices are permanently defined
and re-defined. Study Tantalo et al. (2014) applied a qualitative assessment framework
for the assessment of aforementioned linkages and found that that strategic orienta-
tion to the CSR may have benefits for the competitive profile of corporations. The
study stressed the importance of strategic management to CSR, and this is the reason
why insignificant results were found in order to clarify the relationship between CSR
and competitiveness. The study by Bataglia et al. (2014) developed a correlation ana-
lysis between competitiveness variables and various CSR practices adopted in SMEs
operating inn fashion industry in Italy and France and found a significant correlation
between innovations which was considered as one of the most important dimensions
of competitiveness and CSR initiatives.
Some studies (Anser et al., 2018; Hadj, 2020; Marin et al., 2017; Snircova et al.,
2016; Zhao et al., 2019) dealing with the analysis of linkages between Corporate
Social Responsibility and competitiveness of companies via moderation and mediation
analysis found the mediating role of responsible innovations and environmental man-
agement in relationship between CSR and competitiveness.
It is necessary to distinguish that even though some studies did not aim to split
CSR into separate dimensions, the areas related to social dimension are similar in all
studies, i.e., participation in public events and partnership with local organisations. It
could be stated that in the previously conducted studies, the economic dimension
could be compared to the environmental dimension that aims to reduce cost. The
areas that are related to shareholders are almost identical in all studies, i.e., staff
training and motivation that are mentioned in (Battaglia et al., 2014; Snircova et al.,
2016; Zait et al., 2015) and employee involvement in decision-making, identified in
the current study. It is necessary to stress that a fair partnership with suppliers has
been distinguished in this study, whereas in other studies, the employee health and
safety is discussed as a priority. The areas related to philanthropic dimension are
quite similar in all studies: charitable activities (compared to scholarship granting)
and support for projects solving social problems (compared to support for
local community).
The results of empirical study conducted in Lithuania revealed which social
responsibility dimensions have the biggest influence or are related to certain elements
of competitiveness. The results of the current study were compared with the results
of other studies in this field (see Table 6).
As it can be seen in Table 6, based on the empirical study conducted in Lithuania,
the environmental social responsibility dimension and related areas are mostly affect-
ing company’s financial capacity, image and reputation. However, in other studies
regarding the impact of CSR on competitiveness, on contrary to the research con-
ducted in this study, the influence on the satisfaction of customers’ needs is not men-
tioned (Battaglia et al., 2014; Snircova et al., 2016; Zait et al., 2015). The results of
Tantalo et al. (2014) presupposed that the environmental dimension involved with
1638 J. LU ET AL.

Table 6. Comparison of studies on the relationship between corporate social responsibility and
competitiveness.
Outcomes of the current study
Environmental Social Economic Shareholder Philanthropic
dimension dimension dimension dimension dimension
Financial capacity þ þ
Quality
of production
Satisfied needs þ þ þ þ þ
of consumers
Productivity, þ þ þ
work efficiency
Possibilities for
introduction of
innovations
Image, reputation þ þ þ þ þ
Outcomes of studies (Battaglia et al., 2014; Snircova et al., 2016; Zait et al., 2015)
Financial capacity þ –
Quality –
of production
Satisfied needs –
of consumers
Productivity, – þ
work efficiency
Possibilities for –
introduction of
innovations
Image, reputation þ þ – þ þ
Outcomes of studies (Tantalo et al., 2014)
Competitiveness High involvement Low involvement – Low involvement Low involvement
(this study (related to (related to value
analyses sustainable creation for
competitiveness innovation) suppliers and
as a unit, Medium society)
without dividing involvement Medium involvement
it into separate (related to (related to value
elements of ecological creation for
competitiveness) raw materials) employees)
High involvement
(related to value
creation for
stakeholders)
Source: created by the authors.

competitiveness is characterised by high involvement (when discussing sustainable

introduction of innovations) and medium involvement (when discussing the use of
ecological raw materials in production processes). When comparing social dimension,
it is clear that the results of a current study stress social responsibility relationship
with a company’s image, satisfied needs of consumers, productivity and work effi-
ciency. However, the study of Tantalo et al. (2014) found that the relationship of
social dimension of CSR with competitiveness was insignificant.
Economic dimension was analysed only in this study, and its involvement with the
elements of competitiveness was rarely analysed in other studies. When analysing
shareholder (suppliers, consumers, partners) dimension, it has been noticed that
based on the results of this work, the influence on such elements of competitiveness
as reputation, satisfied needs of consumers, productivity and work efficiency were
identified. Whereas in other studies, only the influence on reputation, productivity
 ECONOMIC RESEARCH-EKONOMSKA ISTRAŽIVANJA 1639

and work efficiency was discussed. Low involvement of shareholder dimension with
competitiveness (when discussing the creation of value for suppliers and society),
medium involvement (in respect of creation of value for the employees) and high
involvement (regarding the creation of value for stakeholders) have been found in the
study by C. Tantalo et al. (2014). Philanthropic dimension, according to C. Tantalo
et al. (2014), is characterised by low involvement with competitiveness. Whereas, the
research conducted in this study stresses that philanthropic activities implemented by
companies influence image and reputation as well as satisfied needs of consumers,
productivity and work efficiency.

5. Conclusions
Based on the analysis of various definitions of corporate social responsibility, it could
be summed up that corporate social responsibility is a company’s voluntary decision
and determination regarding the changing needs of society and business interest
groups to respect social, ethical (moral), legal, economic, environmental aspects in its
activities, aiming to contribute to the concept of sustainable development.
When analysing the influence of corporate social responsibility on firms’ competi-
tiveness, it has been found that company’s implemented corporate social responsibil-
ity practices influence the following aspects of organisation’s activities: reputation,
brand, financial capacity, specificity of the product, loyalty and satisfaction of con-
sumers, attraction of highly-competent workers, market share, work efficiency, cost
and risk reduction. All these aspects of activities provide a competitive advantage for
a socially responsible company.
After the analysis of various empirical studies conducted by scholars all over the
world, it has been found that corporate social responsibility affects company’s com-
petitive profile. However, it has been noticed that not all directions and areas of cor-
porate social responsibility affect socially responsible company’s competitive profile
equally. Usually, socially responsible companies are oriented towards the creation of
value for the employees, because it increases staff productivity and at the same time
encourages company’s competitive advantage among other organisations that are
operating in the market. Social responsibility that is implemented by the company
has different effects on different elements of competitiveness (such as possibilities to
introduce innovations, financial capacity, productivity, etc.).
The conducted empirical research provides that separate social responsibility
dimensions (environmental, social, economic, shareholder, voluntariness) differently
affect separate elements of competitiveness: financial capacity, quality of production,
satisfied needs of consumers, efficiency, introduction of innovations and company’s
image and reputation.
It has been found that neither the quality of production, nor the possibilities for
introduction of innovations in a company are affected by the dimensions of social
responsibility. Whereas company’s image, reputation and satisfied consumers’ needs
are affected by all dimensions of corporate social responsibility that have been ana-
lysed. The important element of competitiveness, i.e., financial capacity, is affected by
1640 J. LU ET AL.

environmental and economic social responsibility dimensions; productivity, work effi-

ciency is mostly related to social, shareholder and philanthropic dimensions.
The obtained results are significant because they help to eliminate the problem
existing in organisations that is related to the failure to understand the benefit created
by social responsibility for a company, as it determines which social responsibility
dimension affects which element of competitiveness.
The main approach applied in this study is a qualitative assessment. As in any
qualitative study, there are several limitations. First, the sample is limited to
Lithuanian companies that are Global Compact members. Second, the generalisability
may only be accurate when comparing companies in similar cultural institutional
environments. The subjectivity is an important limitation as well.
The future research is necessary to test the developed model and extend it to firms
operating in other countries, seeking to reveal the impact of cultural difference on
corporate social responsibility and its linkages to competitive advantage. The sample
of data needs to be expanded by covering more countries and application of frame-
works that are more rigorous and tools as Structural Equation Modelling, and regres-
sion analysis is necessary. The Structural Equation Modelling would allow analysing
the relationship between CSR and competitiveness more deeply and addressing the
mediating role of innovation between CSR and competitiveness as well as moderators
of this relationship.

Acknowledgments
The authors thank the anonymous reviewers and all the editors in the process of manu-
script revision.

Disclosure statement
No potential conflict of interest was reported by the author(s).

Funding
This work was supported by the Program for the Innovative Talents of Higher Education
Institutions of Shanxi (PTIT) under Grant (20191043); the Planning Program for Philosophy
and Social Sciences of Shanxi under Grant (No. W20191020); Key R&D Program of Shanxi
Province, China (Social Development) underGrant (201903D321004); and the Taiyuan
University of Science & Technology Scientific Research Initial Funding (TYUST SRIF) under
Grant (No. W20182014 and No.W20192003); the Program for the Philosophy and Social
Sciences Key Research Base ofHigher Education Institutions of Shanxi (PSBR) under
Grant (No.20190124).

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Appendix 1. The coefficients of impact of CSR dimensions on the elements of firm

competitiveness.
Environmental dimension
Score
Competitiveness 1 2 3 4 Sum
Financial capacity 0.010 0.100 0.070 0.067 0.247
Quality of production 0.053 0.040 0.080 0 0.173
Satisfied needs of consumers 0.007 0.053 0.180 0.027 0.267
Productivity, work efficiency 0.020 0.087 0.100 0.013 0.220
Possibilities for introduction of innovations 0.013 0.053 0.160 0.027 0.253
Image, reputation 0 0.013 0.100 0.240 0.353
Social dimension
1 2 3 4 Sum
Financial capacity 0.060 0.080 0 0 0.140
Quality of production 0.053 0.080 0.020 0 0.153
Satisfied needs of consumers 0.010 0.047 0.170 0.04 0.267
Productivity, work efficiency 0.030 0.073 0.100 0 0.203
Possibilities for introduction of innovations 0.040 0.080 0.060 0 0.180
Image, reputation 0 0.007 0.130 0.213 0.350
Economic dimension
1 2 3 4 Sum
Financial capacity 0.007 0.080 0.110 0.067 0.264
Quality of production 0.033 0.100 0.050 0 0.183
Satisfied needs of consumers 0.010 0.120 0.080 0.013 0.223
(continued)
1646 J. LU ET AL.

Appendix 1. Continued.
Environmental dimension
Score
Competitiveness 1 2 3 4 Sum
Productivity, work efficiency 0.020 0.107 0.040 0.053 0.220
Possibilities for introduction of innovations 0.030 0.100 0.040 0.027 0.197
Image, reputation 0 0.027 0.180 0.106 0.313
Shareholder dimension
1 2 3 4 Sum
Financial capacity 0.013 0.067 0.120 0.053 0.253
Quality of production 0.003 0.093 0.100 0.067 0.263
Satisfied needs of consumers 0 0.02 0.180 0.120 0.320
Productivity, work efficiency 0 0.027 0.170 0.120 0.317
Possibilities for introduction of innovations 0.007 0.073 0.100 0.093 0.273
Image, reputation 0 0.013 0.140 0.187 0.340
Philanthropic dimension
1 2 3 4 Sum
Financial capacity 0.080 0.033 0.010 0 0.123
Quality of production 0.093 0.007 0.010 0 0.110
Satisfied needs of consumers 0.057 0.060 0.030 0.013 0.160
Productivity, work efficiency 0.087 0.020 0.020 0 0.127
Possibilities for introduction of innovations 0.083 0.027 0.010 0 0.120
Image, reputation 0 0.007 0.160 0.173 0.340