From corporate social responsibility to creating shared value : competitive strategies for Chinese international construction companies on the "one belt one road"

Abstract

Empowered by economic globalisation, advanced technologies, high-speed transportation and convention communication, construction companies in recent years have increasingly expanded their activities into the international arena. Chinese international construction companies (CICCs) are of no exception. They are now becoming one of the strongest contenders in the international market. They possess the strengths of, e.g., strong financing capabilities, supply chain sourcing, and productive workforces. Meanwhile, they are faced with growing societal and environmental accusations such as poor construction quality, adverse environmental impacts, and social carelessness. The accusations have been further exacerbated since the ambitious “One Belt One Road” (OBOR) Initiative by the Chinese government in 2013. Under this circumstance, proper strategies are needed to address these societal and environmental concerns for not only the long-term competitiveness of CICCs but also the sustainable development of the built environment.

The concept of corporate social responsibility (CSR) has been considered as the key to tackle the dilemmas between business and society. However, CSR is too often placed at the peripheral rather than at the core of business. Experiences in recent years have shown an evolvement from CSR to creating shared value (CSV). CSV places social business in a strategic direction; only selective social activities represent opportunities to trigger competitiveness. CSV provides a meaningful strategic direction for CICCs to create shared values for both business and society. Although CSV strategies have been explored in some industries, there should not be a “one-size-fit-for-all” strategies to create shared value in different business contexts.

This research aims to develop CSV strategies for CICCs to sustain competitiveness on the OBOR. A mixed research approach combining quantitative and qualitative methods is applied. Principal component analysis (PCA) and panel data regression are used to investigate the relationship between their social performance and competitiveness. The results show that there is an inverse U-shaped curvilinear relationship between CICCs’ social engagement and competitiveness. Based on the analyses, text content analysis and case study are conducted to explore CSV practices and strategies for CICCs to sustain competitiveness on the OBOR. It is found that there are 4 types of issues related to CSV: (1) products, (2) safety, health, and sustainable workforce, (3) local development, and (4) environmental protection. CICCs are encouraged to smartly select social issues to particularly focus on. Also, they are suggested to carefully exercise their management discretion to maximise their competitiveness and create shared value.

The research has significant theoretical, practical, and methodological contributions. Theoretically, it tests and extends the use of theories in explaining an inverse-U shaped relationship between social performance and firm competitiveness. Also, it bridges the theoretical gap by incorporating CSV into the proposed curvilinear relationship. On the practical sphere, this study unravels the CSV view perceived and practiced by CICCs. Moreover, it identifies CSV issues and provides specific CSV strategies for CICCs to sustain competitiveness in the business context of OBOR. This research also makes methodological contributions by exploring mixed methods in developing competitive strategies and offering a PCA method for firm competitiveness measurement.