The importance of corporate responsibility communication, strategies for communication - Research Paper Example

? Messages regarding corporate initiatives that are socially and ethically responsible have been pointed out to have favorable outcomes by evoking positive responses among stakeholders, employees, and the community, on the whole. Research has also indicated the benefits that organizations can attain when external and internal communication of corporate responsibility is carried out. Thus, corporate responsibility (CR) has been associated with positive values and exemplifies the activities and intentions of an organization in respect to their societal duties. This paper, therefore, focuses on CR communication, such as the importance of CR communication, strategies for communication, and the stakeholders who are involved in such process. Introduction Over the years, corporate responsibility (CR) has gained increasing attention from practitioners and scholars alike. The programs intended to demonstrate corporate responsibility have led to significant findings, such as the belief that commitment towards CR activities and communication can improve the perceptions of various stakeholders. Thus, lack of social responsibility may lead to the weakening of stakeholder relationships. CR efforts that are characterized by global themes as well as execution tactics have emerged in the marketplace. Communication of CR in Europe and non-Western countries has reportedly becoming similar to activities in the United States with which reporting and communication are frequently articulated. This suggests that CR efforts, which proactively plan and implement programs that integrate social value with business activities and address problems perceived as part of an organization’s social responsibility, have considerably improved. Therefore, the current trends and evidence highly support the communication of CR activities and programs. Corporate Responsibility: An Overview Primarily, the social responsibility of organizations is to produce goods and services that are socially desirable (Becker-Olsen, Taylor, Hill, and Yalcinkaya. 2010). Furthermore, these companies have the social responsibility of adhering to ethical and legal standards that are viewed by the society as appropriate. This has been presented through a more comprehensive definition that described corporate citizenship as the extent to which firms take on the legal, ethical, economic, and discretionary responsibilities that their stakeholders oblige them to assume. One of the most noteworthy aspects of CR’s definition is the relevance attached to discretionary responsibilities that express the desire of the society to see companies become actively involved in the development and betterment of communities and perform beyond the expected standards. Through previous studies, a number of CR practices have been identified that were categorized as moral or ethical practices, discretionary practices, and relational practices. Diversity, community support, employee support, involvement with the environment, and product manufacturing were considered. Fair treatment of employees, taking into consideration the rights of employees from foreign countries, fair competition with others, responsible actions toward the environment, and exemplifying of truth are all considered as moral or ethical practices in relation to corporate responsibility. Meanwhile, under discretionary practices, a number of procedures have been identified as well, such as the contribution of resources to increase social awareness regarding current issues, support for issues on family and children, support for public health programs, and contribution of cultural programs for the community. Finally, relational practices involve the attempts for establishing long-term relationships with consumers as well as the willingness to consider the views and constructive criticisms of stakeholders regarding business practices (Shum and Yam, 2010). The business benefits of corporate responsibility have been comprehensively examined and results have indicated that CR can generate moral capital among workers with which their morale can be enhanced and rates of productivity and retention can be increased. Consequently, organizational performance can be improved. Social responsibility among firms can also establish public goodwill that can enhance their reputation and protect shareholder wealth. Activities for CR can also represent the availability of unique resources that can preserve profit attrition of companies. In addition, organizations that carry out actions that are socially responsive may reduce transaction costs by increasing their credibility as a reliable partner for transaction, thereby enhancing organizational performance as well. Communication of Corporate Responsibility Although behaviors toward social responsibility among organizations are exemplary, it is of great importance for consumers to learn about such practices. According to researchers, the effectiveness of CR programs primarily relies on the ability of a firm to establish in the public consciousness associations between their CR practices and their corporate image. One of the most relevant drivers for performance is the communication and promotion of corporate responsibility activities (David and Kline, 2005). Aside from the concept of corporate responsibility, communication has been provided with different meanings. Such initiatives for CR communication can affect the perceptions of customers regarding corporate citizenship. Strategies for Communication These communication programs are typically categorized within the range of the press or publicity function of public relations, which is known as media relations. Advertising campaigns have also been widely utilized for publicizing CR practices. Regardless of the initiative used, the desired outcome is familiarity and awareness of consumers and community as a whole. Investigating the outcomes of CR practices should, therefore, integrate the efficiency of firms in increasing the orientation of the public regarding such actions. Previous studies have highlighted what has been communication through environmental reports, websites and other resources that are integrated with CR-related concerns (Guimaraes-Costa and Cunha, 2008). The characteristics, attitudes and behaviors of who provides reports as well as those who are targeted by environmental and social reporting have been highlighted as well. Objective indicators to measure sustainable development and progress relating to corporate responsibility, however, have led to mixed results in terms of effective communication. Nonetheless, these have indicated similarities and differences between countries; for instance, reporting of environmental issues, gender equality, and favorable working environment have not been carried out in Norway (Vormedal and Rund, 2009). Furthermore, the perceptions of the public toward CR-related donations can be influenced by the messages and communication, increasing the emotional involvement of individuals toward product-cause relationships, bringing up ethical concerns. The study of Wang and Chaudri (2009) emphasized the heightened awareness of Chinese companies in terms of CR and relationship management with which communication plays an important role. Communication of corporate responsibility is prioritized in China; moreover, to make use of the most appropriate channels for communication was of paramount importance as well. By means of CR communication, companies in China may increase their awareness of corporate image and culture regarding the implementation of CR initiatives. The communication of disaster relief initiatives was associated with high levels of CR engagement whereas in-house and Internet media was pointed out to be the most common means for CR communication. In another study that examined the similarities and differences that existed in corporate social responsibility (CR) communication, findings pointed out that differences are evident across economic industries that were based on the value-chain position. There was an increased likelihood for these industries to consider employees’ safety, ethical business practices as well as environmental stewardship to be the most relevant; on the other hand, economic industries that had a closer association with their consumers in the value chain are more likely to utilize education and philanthropy for communicating CR efforts (O’ Connor and Shumate, 2010). In addition, the study conducted by Schadewitz and Niskala (2010) emphasized the responsibility disclosures of organizations in Finland. It was asserted that Global Reporting Initiative for CR communication has been viewed as a critical factor for increasing market value among organizations. Packalen (2010), meanwhile, noted that the integration of ethics, responsibility, and aesthetics is an important function in order to effectively communication sustainable development among firms. Culture was emphasized as a significant means of communicating CR initiatives to the public. Other countries have also been investigated in terms of communication strategies for sending CR-related messages. In India, numerous companies have a tendency to make use of a philanthropic platform with the purpose of highlighting projects for community development; this way, CR involvement can be communicated (Planken, Sahu, and Nickerson, 2010). Still, their consumers may not attach importance to this philanthropic process of CR communication compared to other CR initiatives. Thus, it is likely that they will consider other channels of communication, including different marketing communication strategies. The study highlighted a number of ways for Indian organizations to direct their policies for CR communication towards a useful marketing strategy, thereby exerting a definite influence on their stakeholders and maintaining competitive advantage. Herbert and von Schantz (2009) asserted that branding can be a favorable strategy for corporate marketing because it contributes to the differentiation of sales offers. Because ethical business conduct and social responsibility, as values, are intangible, incorporating such principles in the brand can help ensure that organizations are successful in communicating their social values, such as corporate responsibility. Inauspicious results in utilizing the media for communicating corporate responsibility had been identified, including inappropriate press releases or the strong influence and bias of media perceptions on news reports. It has been noted, therefore, that organizations can gain benefits from developing and managing a brand to communicate corporate values. In another study by Golob and Bartlett (2007), Australia and Slovenia had been examined, which are located in two different parts of the world, along with the issues of reporting corporate responsibility (CR). It was found out that reporting are utilized as a relevant means for communicating social responsibility, enabling companies to articulate their short-term and long-term objectives, increase transparency and strengthen involvement with various stakeholders. Additionally, reporting is mainly voluntary which companies have been compelled to carry out owing to market pressures. However, cultural differences were evident. CR reporting in Australia was primarily influenced by management, product, and economic concerns whereas reporting in Slovenia was strongly driven by employee, public, and environmental issues. It was, nevertheless, asserted that reporting incentives must be enhanced for both countries to abide by internal CR reporting standards. Narratives have also been identified as a means for allowing managers to explain and communicate CR-related issues along with other situations of organizational change (Dobers and Springett, 2010). The study of Joutsenvirta (2009) presents how the linguistic perspective can show a receptive understanding of the ways with which CR communication and story-telling can either assist or hamper efforts adhere to a more stable relation between society and nature. Corporate Responsibility and Stakeholders Messages that focus on initiatives demonstrating corporate ethics and social responsibility are typically expected to induce strong and favorable responses from stakeholders. Although the stakeholder model had been integrated into the management theory over the previous decades, stakeholder management has become one of the most encompassing and comprehensive concepts. Stakeholder is generally defined as an individual or group of individuals who may influence or be affected by the accomplishment of the organization’s goals (Morsing and Schultz, 2010). Therefore, there is a need to make use of various approaches for facilitating different issues with stakeholders. As stakeholders are essential elements for a firm’s strategic planning, it is also of paramount importance to delve into the stakeholders’ urgency for the organization’s goals and mission as well as implications of strong relationship with stakeholders. When stakeholders are involved in long-term value creation, a long-term mutual relationship is established that does not only lay emphasis on profit. Rather, while economic survival remains relevant, it is also significant that frequent and positive engagement is evident among various stakeholders to ensure organizational profitability and survival. Consequently, the role of stakeholders in public relations, marketing, and communication is of great importance for increasing awareness among the public regarding a firm’s CR initiatives. Routines for sharing knowledge, complementary sharing of resources as well as effective governance can all be achieved during corporate responsibility especially when stakeholders are given importance. Previous studies have highlighted the possible business benefits of external and internal CR communication with which various stakeholders are involved. In the research carried out by Snider, Hill, and Martin (2003), communication of corporate responsibility had been categorized into a number of stakeholder groupings, namely the customers, employees, and owners. Potential and existing consumers receive messages that draw attention to the value of products and services centered on a relation that emphasizes the importance of identifying and meeting needs. Staff members are provided with CR messages concerning skill development and career augmentation for the enhancement of workers and companies alike, emphasizing issues about race and gender. Messages intended for stockholders and are transferred through CR communication must be characterized by honesty, consistency, and timeliness. Additionally, marketing strategies for quality products must be taken into consideration as well. In this sense, CR involvement of organizations calls for more sophisticated and effective stakeholder awareness, hence the need for highly developed CR communication strategies. It was also asserted by Valor (2005) that organizations should place an emphasis on the common good to articulate CR strategies. As the study focused on the significance of evident CR practice for the efficient communication of corporate responsibility involvement, findings indicated that out that an unfavorable occurrence is the fact that numerous companies only incorporate societal and environmental objectives in their practices once they experience pressure from stakeholders. Furthermore, managers have demonstrated a lack of enthusiasm in sacrificing earnings for the good of the community. Consequently, it is fundamental to realize how the common good is of greater relevance than merely increasing profitability, and that organizations should aim to attain steadiness between environmental, social, and economic performance. In this way, long-term communication can be achieved. In China, Tang and Li (2009) examined the ways with which local and international companies in China carried out their CR communication that will help demonstrate their CR initiatives to their stakeholders through the use of websites. A number of approaches utilized for CR communication were indicated, such as CR being applied as ethical business practice, strategic philanthropy, or ad hoc public philanthropy. Directing initiatives at consumers and businesses was strongly associated with CR communication. International and Chinese organizations put forward their CR practices in diverse ways due to their different relations with international and Chinese stakeholders. Corporate Responsibility and Employee Relations During the management of relationships between employees and the employer, a number of aspects should be examined, such as the perception of the employee regarding his/her relationship with the management or his/her perceptions regarding the quality of the relationship’s various aspects. Corporate responsibility can be practiced in the workplace among employees through integrity, dependability, and competence. Integrity is characterized by the belief that the organization demonstrates fair treatment with regards to its attitudes and behaviors toward employees. Dependability should also be evident as behavioral actions along with verbal statements must be consistent. Competence then refers to the extent to which the firm is able to carry out what it has promised to do. This will also represent the confidence that employees and other stakeholders have regarding the firm’s abilities. In the study of Holtzhausen (2009), long-term planning and profit-making was not strongly related to the relationship dimension. Meanwhile, a healthy working environment, socio-economic empowerment, and a safe working environment were all associated with a strong employer-employee relationship. When employees perceived that the organization is highly capable of achieving their objectives, this further strengthened the relations. Thus, it was assumed that effective communication of objectives, whether these are related to corporate responsibility or not, can bring about benefits for the relationships between employers and their employees. The effectiveness and strength of the organization will also depend on the values that are shared between the firm and its stakeholders, including its employees, with which the communication of corporate responsibility to other stakeholders can be further enhanced. Therefore, it is significant to maintain the most important elements of employee relations to ensure the success of corporate responsibility communication. For instance, when a company expresses a high level of concern towards its employees, this can further increase the likelihood for trust. Managers should take into consideration the trust that is established in employer-employee relationships to make sure that organizational goals are met. It is also fundamental that employees perceive that the company has been living up to the values that it promises to exemplify. Consequently, the workers’ sense of commitment towards realizing business goals can be expected to increase. Similarly important is the achievement of such aspirations with which the more effective a company meets its objectives, the higher the satisfaction level of individuals will be. This way, performance of both short-term and long-term aims can be improved. Corporate Responsibility and Demands from Investors Social investment has received considerable attention over the years due to the fact that companies have undergone tremendous pressures to address the demands of socially aware investors. Non-compliant organizations can be faced with the risk of unfavorable shareholder resolutions proposed by activist investors that are in contrast with the management's recommendations or the pressures from institutions that have major company holdings. At present, institutional investors have become especially powerful and own shares in a great portion of the "universe" of shares. It has also been evident that they face the risks and challenges despite disagreements with the policies and decisions of the management. Many investors have come to recognize the need to pressure management to come up with favorable changes, such as for corporate responsibility initiatives. This awareness has led to the increased pressure among companies to demonstrate effective strategies for corporate responsibility. Hockerts and Moir (2007) emphasized the role that communication played in investor relations (IR) and corporate responsibility. Findings indicated that the function of investor relations has not been fully understood and should still be examined; for instance, two-way communication can be more suitable for IR. Because IR makes opportunities available to capital markets, it is very likely for IR officers to communicate the concerns and observations of the investment company to the management through a more comprehensive manner. Based on the study of IR officers, there has been an increased understanding in terms of a more useful and successful communication with investors. Conclusion On the whole, participation in corporate responsibility has been carried out differently in various parts of the world. Only some can be expected to engage in behaviors that are socially responsible and their actions may demonstrate a higher level of commitment. Nonetheless, many organizations communicate their desire to act in a responsible manner through their corporate responsibility initiatives. Such strategies are communicated by organizations to increase the public’s awareness regarding their participation, enhance organizational performance, and, generally, bring about positive social, environmental, and economic outcomes. Marketing strategies as well as the media have been the most frequently noted means of communicating CR initiatives. Moreover, it has been asserted that a variety of stakeholders, including the employees, investors, and customers, all play an essential role for the success of CR communication. The effect of corporate responsibility awareness remains to be an encouraging finding for companies and the communities as well. 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