Corporate Social Responsibility Programs - Essay Example

Corporate Social Responsibility Programs Marketing Managers Social responsibility is a corporation's obligation beyond that required by law and economics to pursue long term goals that are good for society. Being socially obligated requires only that a business meet its economic and legal responsibilities to society. Social responsive and social responsible corporations go beyond making a profit or meeting economic and legal standards. Social responsive businesses adapt to changing societal conditions. Marketing managers are steered by social norms and act to satisfy a popular social need. While obeying law and economic interest, a social responsible business is involved in social activities that improve society. It does not appear that the responsibilities of a corporation to society, their employees, customers, suppliers, and the communities or shareholders in which they service are in practice According to Robbins, a social responsible business pursues long goals that are good for society and cause no harm. Marketing managers, as moral agents, are required to make practical and as well as ethical decisions. In doing so, managers have to do what is right because it is their responsibility. Why do marketing managers need to ensure that their companies operate visible Corporate Social Responsibility programs (CSR) CSR should be of high priority. This will give managers the opportunity to display their value throughout the company. Public opinion supports corporations pursuing economic and social goals. Social responsible companies tend to have secured long run of profits. Social responsible activities are simply the right thing to do. Seeking social goals create an attractive public image for businesses. Involvement in social programs helps to solve social problems. Addressing social problems before they become serious and costly will definitely benefit the society as a whole. A socially responsible corporation can normally expect minimum government regulations. Regarding stockholder interests, being social responsible will increase a corporation's stock prices in the long run. And many successful businesses have huge profits that will support charitable projects that need funding (Robbins, 2005, Page102). Elfren Sicangco Cruz states that there many definitions of corporate social responsibility. According to the World Business Council for Sustainable Development, CSR is a continuing commitment by business to behave ethically while contributing to economic development; improving the quality of life for workers and their families; the local community and society at large. Mallen Baker suggests that corporate management business processes are to make an overall positive impact on society. The International Organization of Employers says CSR is a voluntary positive initiative by businesses that look beyond legal aspects in economic, social, and environmental areas. Michael Hopkins, in A Plantary Bargain: CSR Comes of Age, goes on to say that corporate social responsibility is the treatment of stakeholders both in and outside the corporation. Corporate social responsibility (CSR) is fundamental to a long term, comprehensive approach to business success. CSR has become one of the benchmarks of an organization's overall success. Corporations as well as their marketing managers need to ensure that every aspect of their performance reflect the values, interests and expectations of society. Why Social responsible activities affect a company's economic performance. There are findings from research studies that can fully explain the importance of corporate social responsibility programs. In such studies, there appears to be little evidence that a company's social activities harm long term economic performance. Companies are reporting that there is positive relationship between social responsibility and economic performance. Marketing managers should, however, certainly consider social goals as they plan, organize, lead and control their company's operations. Corporation can implement CSR at many levels. Responsibility can include the need to provide employees with safeworking conditions, hiring a more diverse workforce, employee volunteerism, philanthropy (giving money to charity), improving environmental practices, provide cause-related marketing, or it can extend into the community to address education issues. The program has to be genuine, and needs to be integrated into the corporate culture. John Friedman, a member in the public relations department at the American College of Emergency Physicians in Dallas and formally the director of public affairs for Herndon, Virginia based Lafarge North America; build a CSR program from the ground up. Though a monumental task, he started by setting up the idea that sustainability is rapidly becoming an industry standard. Along with his team, he set out to develop environmental and community outreach programs and sustainability reporting. Friedman says he spend nights in his office thinking about how to demonstrate the strategic value of his community relations programs. With the assistance of his cross-department team of 18 professionals-environment and safety, human resources, finance and tax, marketing and strategy-the sustainability network was coined. His biggest challenge, however, was to change senior management's perceptions about CSR by demonstrating how the program would generate a profit for the company. According to Friedman, these are the ten steps to creating a CRS program: 1) Identify core competencies, needs issues and markets. 2) Expand to embrace the full scale of the business operationally, starting with top priorities. 3) Gain C-level commitment and support. 4) Organize a set of operating values and principles into employee goals and performance. 5) Organize task forces and matrix teams with dotted-line CSR responsibilities. 6) Use a balanced scorecard approach, including CSR, in the decision making process along such variables as price, quality and delivery. 7) Monitor, report and develop sustainability reports around the GRI guidelines (www.globalreporting.org). 8) Engage in CSR communications, and be transparent. 9) Obtain stakeholder feedback throughout the process. 10) Evaluate and re-evaluate CSR as a strategy tactic in the annual and long term operating plans. He states, "Communications execs must work in concert with the business managers and upper management to develop clear goals in terms of performance, financial, brand image, risk and engagement, and they must aspire to evaluate and move the target forward every six months. This may mean cross-team ownership of results or cultural change management processes to reward decisions that meet profit and social value criteria together" (PR News, 2005). According to Amul, a Gujarat Cooperative Milk Marketing Federation (GCMMF) and India's largest food products marketing organization. CSR is defined as the "commitment of business to contribute to sustainable economic development working with employees, their families, the local community, and society at large to improve their quality of life, in ways that are both good for business and good for development". Amul's CSR program focuses on human development involving the producer, the worker, the supplier, the consumer, the civil society, and the environment. A difficult task, the company firmly believes that a business would not sustain profitability if it did not accomplish at least one of these expectations. CSR is beginning to look as if it is much more than a stagnant practice. It is a continuous and has evolved and expanded throughout the world. As Amul has indicated, social responsibility is a continuous long term efforts involving the entire operation. John S. McClenahen stresses that social responsibility begins with top management because senior managers have a responsibility to define social responsibility for the company, create strategies necessary in the development of an effective CSR program. As leaders, managers responsible for organizational decisions; establishing plans, and goals that concern the corporation. They are expert in handling external relationships. In terms of marketing they possess drive, enthusiasm, optimism and are able to coordinate social activities so that they are efficient and effective with and through others. Top marketing managers have conceptual skills that allow them to understand relationships and visualize how the corporation fits into the environment (Robbins, 2005, Pages 6-7). For example, the Business Roundtable Institute for Corporate Ethics at the University of Virginia's Darden School in Charlottesville, CEOs and other senior executives as supporters of social responsibility, created a dynamic culture for its corporate existence. Top managers are adaptive and have the required skills necessary to accomplish goals. Ricardo Gonzalez, marketing director for El Meson Sandwiches, part of QSR Champ, Incorporation, advocates social responsibility through marketing. Their mascot, Titai visits schools and hospitals and plants trees to encourage environmental awareness. When they introduced their pita bread with special offers, ten cents out of every dollar went to the Red Cross. As a result of such efforts, El Meson Sandwiches is one of Puerto Rico's best known restaurant chains. Citigate Smarts, one of Northern Ireland's leading communications consultancies, embarked on a mission to address corporate responsibility and social marketing issues, especially public education programs and specialist services for nonprofit and charitable organizations. Managing directors, Pippa Arlow and Leonita Fertherson said "Our new CSR division is a natural development for us. We have a strong track record in developing and delivering CSR initiatives, not just in Northern Ireland but across the UK, and, added to our award-winning work in public education and social marketing, this seemed a natural progression for our business." Cape Town business consultant, Reana Rossouw, introduced a new concept in CSR, investment and development-Deep Branding. To boost the corporate reputation, brand image, and returns on corporate social investment (CSI), Deep Branding combines CSI with marketing. Rossouw says that Deep Brand started off within the corporation and expanded to include stakeholders: employees, customers, society and the environment. In addition, it combines CSR, CSI, marketing, public relations, communications, caused-related marketing, volunteerism and philanthropy into a vision of how the brand will enhance and contribute to the future sustainability of the product and goods, manufacturer, service supplier and consumer. Again, corporations must do good by doing the right thing. Paul Klein, a partner at Klein and Sears, a Toronto based social marketing says corporations' role in society have changed. Companies were utilitarian, consistent with the goal of maximizing profits. Not any more. Corporations have more interest in the community, employees and the environment. Corporations are taking on CSR. Clive McDonald, a member of Shell's global fuels research team, designs fuel in an effort to make it the cleanest, most efficient as possible because Shell is attempting to persuade customers how committed they are to the environment. Why Research shows that customers want and expect corporations to make positive contribution to the environment, the community and social issues. Corporate social responsibility has an impact on a corporation's reputation. There are increasing societal expectations. Globally, consumers expect companies to ensure quality product and services at reduced cost, fair treatment of employees, environment protection, and resolutions to social and economic problems. According to a survey conducted by the GlobeScan for HewlettPackard (Canada) 92% of Canadians consumers will purchase a corporation's products or services if it socially and environmentally responsible. Forty two percent said they do not buy products or services from a corporation if they believe that the corporation is not acting responsible. There are two things that are driving consumers regarding accountability, transparency and responsibility. First, society is more informed today than in the past. They can scrutinize and criticize a corporation's behavior due to the fact that activist groups make the public aware. And second, corporations are more susceptible to criticism because their share value is based on intangibles such as brand fairness and social license to operate. This can cause a drop in share price. As a result, customers do not react too kindly to drops in market share. Though corporation are much more social responsible than they were in the past, there are those economic philosophies such as those of Milton Friedman and his followers who cruelly say that management ought to pursue as much profit as possible and good is sure to comeimproved standards of living, and increased national prosperity. Then there is Joel Bakan who firmly believes that modern businesses are not capable of providing service in the best interest of the public. Profit will always be the first priority. Bakan say, the best corporation which commit to enviro-marketing, will not publicly say that they will not drill in the Arctic and forfeit huge profits. He feels that a corporation's actions are self servicing efforts to build brand name. Richard Stechell, who heads Colorado based AddVenture Network says CRS is passing fad. Other opponents think that socially responsible corporations' activities do not cover the cost of operations. Corporations have enough power. They certainly do not need more. Corporate leaders are not qualified to address social issues. And last, there is no accountability for social activities (Robbins, 2005, Page 102). None of these beliefs should discourage corporation in their efforts to be socially responsible. Marketing managers need to ensure that their companies operate visible Corporate Social Responsibility programs (CSR) because it is the ethical and the right thing to do. From a socioeconomic view management's social responsibility is not only to maximize profits. Corporations are not independent entities responsible only to stockholders. They should have a responsibility to the society who purchases their products and services. Businesses are not solely economic institutions. Regarding social, political, and legal issues, society wants businesses to get involved in social issues. Corporations have more than a social obligation. They should be much more than responsive. As a public entity, corporations should feel a responsibility to enhance pubic good. And marketing managers, as moral agents, shouls aggressively pursue social justice, preserve the environment, build social and cultural activities, and commit to improving society even it there is a negative impact on profits (Robbins, 2005, Page 100-101). What if marketing managers address their social responsibilities from a different view Experts think that if manager thought more about the social impact they have on society they could be more concerned with social issues. Social Impact Management is the intersection of business practice and wider society issues that reflect and respect the complex interdependency between the two. Developed at the Aspen Institute, this concept would help in understanding business needs and social issues. If marketing managers, as change agents, change how they view social impact they would probably be aware of whether they are being responsible in decision making (Robbins, 2005, Page 122). Furthermore, Leanne H.Y. Too, Anne L. Souchon, and Peter C. Thirkell, suggest that more empirical research has to be conducted especially between relationship marketing and customer loyalty. Enhancing customer commitment and loyalty could be beneficial to a social responsible corporation. REFERENCES "Add a Touch of Humanity to the Mix", Times Media Limited, Business Day (South Africa), Economy, Business and Finance, 17 January 2005, Page 5. "Building A CSR Program From The Ground Up", PR News Potomac: May 25, 2005, Volume 61,Issue21,Page1, viewed 15 march 2006 http://library.troy.edu:2055/pqdweb did=844561941&sid=4&Fmt= 3&clientId=15382&RQT=309&VName=PQD. Butler, David. (2005). "Appointments: There's Plenty to Be Said for Positive Corporate Social Responsibility", Midland Independent Newspapers, Birmingham Post, First Edition; Business, 9 April 2005 Page 23. "Corporate Social Responsibility and Its Impact on Corporate Reputation, Brand Strategy", London: 8 September 2005, Page 40, viewed 15 March 2006 http://library.troy. edu:2055/pqdwebdid=893871111&sid=1&Fmt=3&cli entId=15382&RQT= 309&VName=PQD. "Corporate Social Responsibility; Have a Heart...Have a Heart", (2006), Marketing Week Centaur Communications Ltd., 12 January 2006, Page 22. "Corporate Social Responsibility, The Amul Way", Financial Times Information, Global News Wire-Asia Africa Intelligence Wire, The India Express Online, Financial Express, 7 August 2004. Cruz, Elfren Sicangco, (2004), "Corporate Social Responsibility: A Radical Concept", BusinessWorld Publishing Corporation, BusinessWorld, 23 March 2004, Page 5. Harris, Rebecca, "Growing Responsibilities" Marketing, Toronto: August 15-August 22, 2005, Volume 110, Issue 27, Page 15, viewed 15 March 2006 http://library.troy.edu:2055/ pqdwebdid=886369341&sid=&Fmt=3&clientId=15382&RQT=309&VName=PQD. "Helping Hand to Take a Respondible Approach", (2005), Financial Times Information, Global News Wire - Europe Intelligence Wire, Century Newsletters Ltd., Newsletter. 15 November 2005. Jayne, Vicki. (2004), "Social Responsibility Corporate Philanthropy-How Vodafone Tries to Make Difference", Profile Publishing Ltd., New Zealand Management, 2004 September 2004, Page 34. Lawson, Russell, (2005), "No Need to Be a Corporation to Have Social Responsibility" Western Mail and Echo Ltd. First Edition; Business, 16 March 2005. Page 9. Lichtenstein, Donald R, Drumwright, Minette E., Braig, Bridgette M, 2004, The Effect of Corporate Social Responsibility on Customer Donations to Corporate-Supported Nonprofits", Journal of Marketing, Chicago: Volume. 68, Issue 4, Page 16, viewed 15 March 2006 http://library.troy.edu 2055/pqdwebdid=717663361&sid= 1&Fmt=2&cli entId=15382&RQT=309&VName=P. McClenahen, John S. Practicing The Principles, Industry Week, Cleveland: 2005 November Volume 254, Issue 11, pg. 32, viewed 15 March 2006 http://library.troy.edu:2055/ pqdwebdid=916406091&sid=6&Fmt=4&clientId=15382&RQT=309&VName=PQD. Nicholas, Kate, (2005), "Public Relations: Corporate Responsibility: The Art of Keeping Up Appearances; Reports Into Companies' Corporate Responsibility Used to be a Triumph", Newspaper Publishing, The Independent (London), 13 June 2005, First Edition; Features, Page 12. Okalow, Samson, "Corporate Responsibility", (2004), Brunico Communications, Incorporate, Strategy, 17 September 2004, Special Report: 15 Issues to Face, Page 38. "Research: Corporate Reputation" 2004, Centaur Communications Ltd., Brand Strategy 3 November 2004, Page 40. "Research and Markets: Get Key Insights into the Changing Role of the Public Relations Industry" 1994-2005, M2 Communications Ltd., M2 Presswire, 24 October 2005. "Ricardo Gonzalez Advocates Social Responsibility Through Marketing", Who's Who in Marketing in Puerto Rico 2004, Caribbean Business, Casiano Communications, 28 October 2004, Page W28, viewed 15 March 2006 http://library.troy.edu 2083/externalframe.asptb=1&_ug=sid+F90470B2%2D75B9%2D 49B6%2DAB48%2 D378CEB4EB862%. Rick, Petersen. "Responding to Changing Stakeholder Expectations", Marketing, Toronto: 6 June 2005, Volume 110, Issue 20, Page A8, viewed 15 March 2006 http://library.troy. edu:2055/pqdwebdid=855628431.&sid=2&Fmt=3&clientId= 15382&RQT= 309&VName=PQ. Robbins, Stephen P and Coulter, Mary 2005, Management 8th Edition, Upper Saddle River, New Jersey: Pearson Prentice Hal, Pages 6-7, 12, 99-131. Roberto, Ned and Roberto, Ardy 2005, "Market Your Company's Corporate Social Responsibility (CSR) Programs-I", Financial Times Information, Global News Wire - Asia Africa Intelligence Wire, Philippine Daily Inquirer, 4 February 2005. "Building A CSR Program From the Ground Up", PR News, Potomac: 25 May 2005, Volume 61, Issue 21, Page 1, viewed 15 March 2006 http://library.troy.edu:2055/pqdweb did=844561941&sid =1&Fmt=3&clientId=15382&RQT=309&VName=PQD. "Special Report: Four Knows Make a CRS 'Yes'", PR New, Potomac: 23 January 2006, Volume 62, Issue 4, Page 1, viewed 15 March 2006, http://library.troy.edu:2055/pqdweb did=974593081& sid=13&clientId=15382&RQT=309&VName=PQD. "The New 21st Century Advertising" 2004, Lafferty Ltd., Bank Marketing International, 31 October 2004, Page 8. The Organization, "Welcome to Amul - The Taste of India", 2000-2001, viewed 15 March 2006, http://www.amul.com/organisation.html. Too, Leanne H. Y., Souchon, Anne L., et al 2001, "Relationship Marketing and Customer Loyalty in a Retail Setting: A Dyadic Exploration", Journal of Marketing Management. Westburn Publishers, Ltd, Volume 17, Numbers 3-4, Pages 287-319(33). Read More