CSR as a Driver of Corporate Reputation: Family Firms in the Italian Luxury Industry

Abstract

The aim of the paper is to analyse the relationship between Corporate Social Responsibility (CSR) and brand reputation in the luxury sector. In particular, the paper from one hand analyzes the drivers that lead to a growing integration of social responsibility in the competitive strategies of luxury firms and, on the other hand focuses on the role of CSR as a driver of brand reputation. Starting from review of the literature, the factors that influence the reputation in the brand-based global luxury industry are discussed, highlighting a gradual shift from reputation based on product quality to one focused on firm’s sustainability. The methodology also includes three case studies of Italian family firms representing best practices in CRS reputation according to 2015 version of Standard Ethics Italian Index: Brunello Cucinelli, Damiani and Luxottica. The study highlights the increasing role CSR practices are assuming in the luxury industry along with the needs for luxury firms to adopt strategic innovations and innovative business models coherent with the principles of sustainability. Furthermore, the analysis illustrates how different socially responsible behaviors have influenced the economic results of the three companies analyzed. The empirical evidences contribute to the CSR and reputation literature by focusing on Italian family firms operating in the luxury sector.