Corporate Social Responsibility to Enhance Goodwill and Increase Sales - Case Study Example

Corporate social responsibility helps to enhance goodwill and increase sales: A case of Starbucks and related examples Table of Contents Business Context 3 Research Question and Project Objectives 4 Literature Review 4 Project Methodology 8 Structure and Time Scale 9 Ethical Considerations 9 References 12 Business Context In today’s age, sustainability is the prime essence of an organization. But, over the past few years, maximum extents of the organizations are facing the pressure of presenting ethical responsibilities and behaviours towards the environment. This is done, in order to amplify the reliability and trust of the shareholders, customers and employees so as to increase the profitability and productivity of the organization in this competitive market among others. Therefore, in order to improve the image and position of the organization and its product lines among its target customers, maximum extent of the organizations try to offer more concentration over corporate social responsibility (Mallin, 2009). Corporate social responsibility is recognised as sort of commitment so as to enhance the well-being of the society through varied types of corporate resources. Such type of CSR initiatives are taken by the multinational organizations as it is considered as a vehicle to reduce varied types of environmental issues in an effective way. By doing so, the reputation and status of the organizations might get enhanced to a significant way thereby reducing the upcoming threats and challenges. Moreover, corporate social responsibility is acts as a driving force to increase the loyalty of the customers towards the products of that specific organization that may amplify its prospective and profitability. Similarly, corporate social responsibility also tries to offer good working condition and environment to the employees so as to amplify their devotion and dedication towards the firm. And it also helps to reduce the rate of attrition of the employees thereby declining the brand value and consistency of the organization in the market. Hence, it might be stated that corporate social responsibility is a recognised as a weapon that may prove effective in enhancing the market share and competitiveness of the organization (Mallin, 2009). Therefore, due to these underlining reasons, most of the branded and reputed organizations such as Starbucks, Coca-Cola, Nike, and McDonalds offer high attention over the concept of corporate social responsibility. The above mentioned reasons are the motivating factors behind choosing the topic of the paper. Research Question and Project Objectives Research Question: Whether corporate social responsibility is essential for organizations to amplify its sale and goodwill or not? Objectives: 1. In what ways; corporate social responsibility is used as a device or technique to amplify the opportunities of the organization in this aggressive age by reducing the threats. 2. In what ways the intangible assets such as goodwill, reputation or work forces might prove effective in amplifying the profitability and productivity of the organization among many other rival players. 3. In what ways, the public relationship or customer relationship might enhance the brand value and loyalty of the organization in the market to a considerable extent. So that, the organization might increase its customer base and uniqueness in-spite of high bargaining power of the customers and competitors. However, in order to answer this research question as well as the objectives of this project, the corporate social responsibility initiatives of numerous branded organizations are used in this research paper such as Nike, Coca-Cola, Starbucks and Mcdonalds etc. Literature Review According the Visser & et. al. (2010), in this age, the concept of corporate social responsibility is offered high attention as compared to previous era. Corporate social responsibility is a sort of corporate self regulations implemented within the business model of the organizations in order to enhance its reputation and distinctiveness in this aggressive age. It is a self regulating mechanism used by the organizations in order to enhance its activities over the environment and society to create a positive impact over the customers, employees, stakeholders, shareholders etc. By doing so, the organizations might improve its profitability and market demand that may increase its strengths and competitiveness. Moreover, positive social activities might prove effective for the organizations to increase the commitment and retention power of its employees that may increase its propensity to develop highly inventive products and services as compared to others (Visser & et. al. 2010). According to Mallin (2009), invention of highly innovative product and services might attract more and more customers towards the brand that may amplify its total sales and revenue. Improvement of the revenue might increase the dominance and sustainability of the organization in the market that may reduce its challenges. Thus, it might be stated that corporate social responsibility is a technique to enhance the demand of the products by offering best quality of products and services to its target customers (Mallin, 2009). Carroll (2001), on the other hand stated that corporate social responsibility is a medium to increase the goodwill or popularity of the organization in this age of high competitive rivalry. Keeping these concepts in mind, the organization of Starbucks tried to offer the best cup of coffee to its customers, so as to improve its relationship and bonding with them. By doing so, the organization tried to develop a positive impact over the customers and the communities that may amplify its consistency and competitiveness (Carroll, 2001). So, it always desired to become the innovators as well as leaders in the segment of coffee by presenting the slogan, “one person, one cup and a single neighbourhood”. Furthermore, Starbucks tried to offer the best quality of ingredients within the coffee, so as to make it more refreshing and mesmerizing. But in order to offer best quality of ingredients, soil management experts and crop production experts are introduced within the region of Costa Rica. Following the words of Morsing and Schultz (2006), the organization of Starbucks became successful in presenting the highest quality of products to its target customers so as to increase their dependency and trust over the brand as compared to many other rival players. This strategy acted as a boon for the organization thereby amplifying its total sale and profitability in the market among many other rival players (Morsing & Schultz, 2006). In addition, the organization of Starbucks tried to offer varied types of jobs through Starbucks Foundation so as to improve its reliability and brand value. This strategy helped the organization of Starbucks to increase its dominance and reliability within the minds of the customers that may increase its reputation and status. Along with this, Starbucks is highly committed in reducing the carbon footprints over the environment by declining the operational costs. Moreover, it also used renewable energy devices within its stores so as to reduce its carbon footprints. This proved extremely effective for the organization that amplified its prosperity and profitability in the market among many rival players. Similarly, the organization of Nike tried to offer innovative designs in apparels and sports-wears through the use of recycled products. Along with this, it made use of environmentally preferred materials such as organic cotton, recycled polyester, leathers etc so as to enhance the trust and loyalty of the customers over their brands. Furthermore, it also introduced recycled plastic bottles that enhanced its sustainability and competitiveness in this aggressive market among many contenders. This strategy of recycling is implemented in order to reduce the emission of carbon dioxide in the atmosphere thereby declining its carbon footprints. However, implementation of this strategy proved quite worthy for the organization of Nike that increased its market share and dominance. The following model was proposed by Archie in 2009 to show the framework on how CSr works. In addition to Nike and Starbucks, Coca-Cola also tried to offer more attention over corporate social responsibility, so as to amplify its position and reputation in the market. Coca-Cola tried to use best quality of ingredients so as to enhance the confidence and dependability of the customers among others. Likewise, Mcdonald’s offered free fruits with the Happy Meals for the kids in order to amplify their well-being and health. Along with this, it offered varied types of job opportunities for the female members of the society so as to amplify their career opportunities and standard. In addition, Mcdonald’s uses best quality of food ingredients in order to enhance quality and safety of the customers. This is done in order to amplify its profitability and brand image in the market among many other rival contenders. Along with this, by offering best ingredients, the loyalty and confidence of the customers over the products of Mcdonald’s might get enhanced that may increase its total revenue and total sale as compared to others. Archie (1999), the switchover costs of the customers might also get reduced that may prove extremely effective for the organization of Mcdonald’s thereby increasing its aggressiveness. Hence, it might be clearly revealed from the above mentioned points that corporate social responsibility is recognised as a technique to amplify the market share and reliability of the organization. Besides, it might also be used as a device to amplify the profitability and customer loyalty thereby enhancing its sustainability and goodwill in this aggressive era. Corporate Social responsibility is also a technique that may enhance the relationship with the customers that may increase the total sale and uniqueness among its competitors. Thus, corporate social responsibility is accepted as a catalyst that may amplify the total revenue and efficiency of the organization in this age among others. So, maximum extent of the organizations in this age tries to offer high concentration over the concept of corporate social responsibility as compared to others (Archie, 1999). Project Methodology In order to fulfil this research paper, qualitative approach is used. In this approach, secondary research methods such as online sites, news, journals, annual reports etc are used to collect varied types of information regarding the corporate social responsibility initiatives of various organizations mentioned above such as Nike, Mcdonald’s, Starbucks etc. The data needed for this paper will be collected from online resources, journals and some other secondary sources. Primary research methodology will not be a valid methodology in this case since the topic is not wide enough to do that. It will be difficult to collect responses of the respondents and present them in the most appropriate fashion. This justifies the use of secondary research as the preferred methodology on this paper. Along with this, the exploratory research design is used to analyse the research question in an effective way. This design proved extremely worthy in discovering varied types of inventive ideas and facts regarding corporate social responsibility. With the help of exploratory research design and secondary data collection methods, it might be revealed that corporate social responsibility is considered as an important technique to improve the brand image and consistency of the organization in the market among others. However, it might also be used as a tool to attract more customers towards the product lines of the organization that may increase its profitability and sustainability to a significant extent among others. It is proved by searching and accessing varied types of sites and annual reports of the organizations described above. Structure and Time Scale The structure of this research paper might include varied layers such as market research, proper planning to fulfil the objectives of the project, detail designing of the research objectives, test planning, questions and answer sessions. June, 2014 July, 2014 Aug, 2014 Sept, 2014 market research Proper planning to fulfil objectives detail designing test planning Data collection process Ethical Considerations In order to offer high attention over corporate social responsibility, the organization might try to maintain ethical behaviours and its vision in an effective way. For example: the organization might try to offer proper working conditions and advanced machines so as to improve its productivity and profitability (Asongu, 2008). Along with this, it might offer best wages to its employees in order to motivate them towards the assigned tasks and responsibilities in order to increase their level of performances. So, the organization of Nike and Starbucks retained its vision to offer best quality of coffee to its customers so as to retain them for longer period of time. However, in order to do so, the organizations tried to implement best quality of ingredients to satisfy the changing taste and preferences of the customers. This strategy helped the organizations to fulfil the vision to offer best products at a competitive price are easily fulfilled. By offering best products, the level of relationship with the customers enhanced, which is extremely essential in this age. As relationship is the most essential aspect that may prove effective for the organization of Starbucks and Nike to amplify its corporate image and market share in the market among others. Moreover, due to effective relationship, the organization might become successful in attracting a wide range of customers of varying age groups and income groups thereby increasing its profitability and total sale of the products. Personal data shall be safely kept and privacy should not be hampered. Confidentiality should be maintained throughout the research process and protection of the participants should be a prime responsibility. Other than Nike and Starbucks, Mcdonald’s tried to offer fruits with their Happy Meals so as to satisfy the changing taste of the kids. This helped the organization to increase its reputation and demand that proved effective in reducing its threat of new entrants and competitor rivalry. However, in order to offer such an effective concentration over the concept of corporate social responsibility, each and every employee is trusted and respected. Only then, the devotion and motivation rate of the employees towards their assigned tasks might get enhanced thereby amplifying its corporate social responsibilities. In addition, the organizations of Starbucks and Nike also offer special trainings to its employees so that they might maintain proper communication with its customers. Only then, the confidence and satisfaction rate of the customers might get enhanced that may increase the profitability and brand image of the organization in the market. Likewise, the employees of the organization of Coca-Cola understood the changing demands of the customers and tried to prepare low calorie products so as to retain its effectiveness and demand in the market. This proved effective for the organization by attracting the health- conscious customers that amplified its prosperity and uniqueness in the market among many rival players. So, the demand of the products of the organization of Coca-Cola increased to a considerable extent that amplified its position and competitiveness among others such as Pepsi. Thus, it might be clearly revealed that corporate social responsibility is effective only if the organization tries to fulfil the demands and requirements of its target customers. References Archie, B, C. 1999. “Corporate Social Responsibility. Evolution of a Definitional Construct”, Business& Society, Vol 38 No 3 Asongu, J, J. 2008. ”The History of Corporate Social Responsibility”. Journal of Business and Public Policy History of CSR Volume 1, Number 2. Carroll, A. B. 2001. Ethical Challenges for business in the new millennium: corporate social responsibility and models of management morality, in Business Ethics 01/02, Richardson, J.E. (Ed). Dushkin/McGraw-Hill, Guilford, CT, 198-203. Mallin, C, A. 2009. Corporate Social Responsibility: A Case Study Approach - Page 141. . New York: Springer. Morsing, M. & Schultz, M. 2006. Corporate social responsibility communication: stakeholder information, response and involvement strategies. Business Ethics: A European View, 15(4), pp. 323-338 Visser, W. & et. al. 2010. The A to Z of Corporate Social Responsibility. Germany: JohnWiley & Sons. Read More