Being Alike or Different: Observations of Optimally Distinctive Pathways in CSR Strategies

It is well established that firms achieve competitiveness among peers by building differentiated CSR profiles. By extending the theory of optimal distinctiveness, this study supplements this literature and explores the competitive pathways of CSR engagement separately for firms that only stick with regulatory baseline and for firms that build differentiated CSR profiles. The study conducts an exploratory fsQCA analysis in a semi-experimental research setting that firms simultaneously perceive regulatory (i.e., stock exchange regulations) and voluntary standards (i.e., CSR award schemes) to promote CSR practices in Hong Kong. We found that, instead of a single convergent optimal point for all, competitive firms have variations in their demands of being optimal. In addition, their optimal points are not static. They adapt their CSR practices when perceive the changes in social expectations. The study demonstrates that firms tend to have multiple and non-static optimal points over time. Competitive firms tend to make adaptation against the new benchmark that is compatible to their strategic positions.