Analysis of corporate social responsibility in the service sector: does exist a strategic path?

Abstract This paper proposes a strategic path managers might follow in order to optimise the outcome of the implementation of Corporate Social Responsibility (CSR) activities. As a starting point, we analysed the practice of CSR and its impact within a service industry, namely the Italian banking sector. Our aim was to understand the impact of CSR on the service company both externally and within the company itself and consequently our research was conducted on two different levels. The corporate level considers CSR as it is perceived by top management, and the operational level takes into account the perspectives of the front line employees and customers. Analysis at the corporate level was carried out by means of a thorough examination of the social reports and Internet sites of the service companies concerned, whereas the front line was studied by administrating a structured questionnaire, issued both to employees and to customers in a sample of bank branches. The research demonstrates that service companies are in fact implementing CSR initiatives and that stakeholders have a considerable interest in such initiatives. However, should the CSR initiatives be used as a tool solely to improve the brand equity rather than to improve relationships with their main stakeholders (employees and customers), then a boomerang effect is produced whereby the stakeholders pinpoint the CSR initiatives as one of the main reasons for their discontent with the service company. Although top managers invest in CSR initiatives in order to increase the satisfaction of the stakeholders, should the main stakeholders be unsatisfied with the management of the service company core business, the CSR initiatives might be rendered rather ineffective. As a result, the CSR initiatives may be a sign of underlying rift between top managers and the front line employees within the company, which in turn might also damage the relationship between bank and its customers. The implications of the findings in this paper provide a managerial tool for use in the implementation of CSR. This tool dictates a specific path to be followed which also requires precise timing for its success. Copyright © 2008 John Wiley & Sons, Ltd.