Own the Future: 50 Ways to Win from The Boston Consulting Group

Chapter 34

Social Advantage

Martin Reeves, Dieter Heuskel, and Thomas Lewis

Most companies now understand the necessity of maintaining a social license to operate. But the increasing interdependence between business and society magnifies strategic risks and opportunities alike—and calls for new approaches.

The impact of business on the natural and social environment has grown and become more visible. Citizens and nongovernmental organizations have higher expectations for the social role of business and are better informed, engaged, and able to mobilize when they believe that business has overstepped its social contract. Investors are beginning to augment financial metrics such as total shareholder return with measures of social performance and risk when assessing long-term investment potential. In the wake of the global financial crisis, there has been a shift of legitimacy and influence away from business and toward national governments, arguably ushering in a period of greater activism directed at business. The need for clear thinking on business and social strategy has never been greater.

We define social advantage as a company's ability to generate value and achieve competitive advantage by sustainably aligning its business model with its broader social and ecological context. This chapter offers an integrated framework for realizing such alignment.

Obstacles to Integration

Many companies have struggled with the ambiguities of corporate social responsibility, corporate responsibility, ...