ABSTRACT
This chapter proposes a framework for assessing the strategic potential of corporate social responsibility (CSR). It explores how the concept of value creation is framed in strategic management literature. Value creation for the firm through the development of new products or new markets or by bottom-of-the-pyramid strategies are comparable with general innovation activities. CSR has potential to become a strategic activity adding value on different dimensions—business, society and ecosystems—if two conditions are met. The first condition for strategic CSR is that CSR needs to become integrated with the strategy of the firm through value creation, value integration and value redistribution. The second condition for CSR as strategic activity is to measure and monitor its impact across environmental, social and economic dimensions. Performance measurement, traditionally used to measure companies' efficiency, profit and competitive advantage, builds on output thinking. Life-cycle assessment provides a framework and indicators for the measurement of ecological impacts.
