Center for Comparative Management Studies

Structuralist and Reconstructionist Strategies

The traditional process for identifying and executing strategy calls for companies to take their external environment as a “given” and analyze that environment to determine the best way care out a competitive advantage in that environment by following either a “differentiation” or “low cost” strategy.  In this report, however, we examine a different approach that argues that organizational strategies can and should vary based on structural conditions, the resources and capabilities of the organization and the organization’s “strategic mind-set” and that companies can develop and implement strategies that actually reshape their external environment in a way that is most favorable to them.

Another Cultural Dimension--Profits versus Social Responsibility?

National societies—countries—have been measured and categorized using a number of different dimensions.  Recently, the results of a survey published by Edelman Trust Barometer 2011 provided interesting insight into the attitudes of members of the “informed public” (broadly defined to include university graduates who were in the top quartile of wage earners in their particular age groups and countries) in 23 countries around the world regarding the tradeoff between profits and social responsibility confronting companies.  Respondents were asked whether they “strong agreed” or “somewhat agreed” with a famous statement made by Milton Friedman: “the social responsibility of business is to increase its profits”.  The Economist reported highlights of the results of the survey including the following:

• Seven of the 23 countries had 60% or more of their respondents indicating some minimal level of agreement with the statement, thereby strong rejecting the popular push for corporate social responsibility (“CSR”).  These countries included, in order, the United Arab Emirates (84% approval of the statement), Japan, India, South Korea, Singapore and Sweden.
• The US placed 9th among the 23 countries with 56% approval of the statement, coming in just behind Mexico and ahead of Poland.  The United Kingdom was in the bottom third of the group with 43% approval of the statement, an interest result given that companies in that country subject to its 2006 Companies Act are required by law to render reports on their CSR records.
• Among the top 10 countries on the list were four members of the dynamic emerging markets group—India, Indonesia, Mexico and Poland; however, respondents from China and Brazil were among the most enthusiastic proponents of CSR ranking 19th and 20th, respectively.