Conforming for competitive advantage - Institutionalising corporate social performance

Abstract: While corporate social responsibility has gained considerable academic, corporate and media attention, is it actually becoming institutionalised as a legitimate part of business? This paper investigates the relationship between corporate social performance, reputation and conformity among organisations in a population. Organisational theory suggests that by adopting similar practices, organisations gain legitimacy and support from important stakeholders. This case study investigates the institutionalisation of corporate social responsibility practice through a case study of the Australian banking industry. Since deregulation, the social impacts arising from changes to industry practice have been widely criticised. Despite this, one major bank has moved to the Number 1 reputation ranking of all Australian organisations for three years in a row. So are their responsibility practices institutionalised across the industry? The conclusion of this paper is ‘not yet’, raising a number of questions about citizenship, reputation, competitiveness and conformity. One potential outcome is that by improving the reputation of the entire population, the reputation of each organisation will also improve. I argue that through the process of institutionalising corporate social responsibility across the members of a population, the reputation of all those organisations will improve giving them a competitive advantage against other types of organisations in the same market.