Corporate Social Irresponsibility and Competitive Advantage: Lessons from Parmalat’s Turnaround

The large number of scandals which rocked the corporate world since the end of the twentieth century have fueled a considerable body of research regarding the factors which drove companies to adopt socially irresponsible behaviors and the institutional remedies which may discourage the repetition of such episodes. Today, the time lag since the initial upsurge of corporate scandals allows to shift attention towards the post-scandal turnaround processes brought about by such companies and the factors which influence their performance. Through the in-depth longitudinal study of a particularly successful turnaround which occurred at Parmalat and its comparison with other partially overlapping cases, this study highlights the role played in these processes by the maintenance of coherence between the strategy pursued by the company, the requirements of its external environment and the companies’ resources and capabilities in its core business(es). Conceptual and managerial implications on the relation between strategy and market legitimization, corporate social irresponsibility and firm survival are discussed.