Corporate Social Responsibility (CSR) is a process with the aim to embrace responsibility for the company’s actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere.
‘It refers to the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.’ – H.R. Bowen
Learn about:- 1. Introduction to Corporate Social Responsibility 2. Meaning of Corporate Social Responsibility 3. Definitions 4. Concept 5. Evolution 6. Nature 7. Importance 8. Salient Points 9. Examples 10. Approaches 11. Different Interpretations 12. Impact of Social Media 13. Developing a Successful Corporate Social Responsibility Program.
Corporate Social Responsibility (CSR): Meaning, Concept, Nature, Importance, Examples and Other Details
- Introduction to Corporate Social Responsibility
- Meaning of Corporate Social Responsibility
- Definitions of Corporate Social Responsibility
- Concept of Corporate Social Responsibility
- Evolution of Corporate Social Responsibility
- Nature of Corporate Social Responsibility
- Importance of Corporate Social Responsibility
- Salient Points of Corporate Social Responsibility
- Examples of Corporate Social Responsibility
- Approaches of Corporate Social Responsibility
- Different Interpretations of Corporate Social Responsibility
- Impact of Social Media of Corporate Social Responsibility
- Developing a Successful Corporate Social Responsibility Program
Corporate Social Responsibility – Introduction
Corporate social responsibility is an analytical tool that can be used in the field of business management to facilitate different business practices, both from an ethical angle and a utilitarian perspective. From the standpoint of CSR, an enterprise is accountable for its impact on all relevant stakeholders. Through CSR, companies affirm social and territorial cohesion, quality, and environment.
This affirmation helps business managers to establish networks of trust, loyalty, and cooperation within and outside their organizations.
CSR is a concept whereby companies integrate social and environmental concerns into their business operations and in their interaction with their stakeholders (employees, customers, shareholders, investors, local communities, and government), on a voluntary basis. Furthermore, CSR is also associated with the principles of sustainability. This principle argues that every organization should make decisions based on their immediate and long-term impact on the social and environmental factors, rather than only the financial factors.
When an organization only concentrates on maximizing its profits, the profit becomes probabilistic. If the sense of ethics of the people of the organization, particularly of the top management, is not adequate enough, it is believed that the CSR orientation will also be less.
The management of human values and corporate trust is a long, arduous, and unpleasant journey that requires out-of-the-box thinking matched with the capacity to relate to the empathy of individuals, society, and other stakeholders. Hence, rapport-building is a crucial requirement in the context of trust management.
CSR is particularly important in today’s age of decreased product differentiation and heightened competition. CSR initiatives are innovative and a less imitable means of strengthening customer relationship and loyalty. In this context, it is relevant to mention that 80 per cent of the world’s 250 largest companies have filed CSR reports in 2008.
In addition, there has been a heated debate around the Companies Bill, 2009, which required all employers earning a net profit of more than Rs. 100 million to contribute at least two per cent of their income towards CSR. CSR ratings play a significant role in the rankings of the ‘most admired companies’ by magazines such as Forbes and Money.
Corporate Social Responsibility – Meaning
Traditionally, providing goods and services to society according to their demands and needs, maximizing corporate profits and creating more job opportunities were viewed as social responsibilities of the business enterprises. But the focus gradually changed from economic aspect to social aspect of the business decisions.
Business organisation is viewed as an institution that helps in solving a broad range of social problems like poverty, crime, pollution, raising the level of education, creating better job opportunities, upliftment of minority and weaker sections of society, etc.
Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line-Approach”), while at the same time addressing the expectations of shareholders and stakeholders.
CSR is a process with the aim to embrace responsibility for the company’s actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere.
The term “corporate social responsibility” came into common use in the late 1960s and early 1970s. It was used to describe corporate owners beyond shareholders. ISO 26000 is the recognized international standard for CSR.
According to corporate social responsibility (CSR) an enterprise is accountable for its impact on all relevant stakeholders. It is continuing the commitment of the business to behave fairly and responsibly and contribute to economic development while improving the quality of life of the workforce and their families, as well as of the local community and society at large.
By expressing their social responsibility, companies are affirming their role in social and territorial cohesion, quality and environment. Through production, employment relations, and their investments, companies are able to influence employment, the quality of jobs and the quality of industrial relations, including respecting fundamental rights, equal opportunities, non-discrimination, the quality of goods and services, health and the environment.
Ultimately, CSR can only be taken on by the firms themselves. However, it can also pose challenges to policy makers to develop or adapt policies and legislation, in order that they may support and promote the awareness of the business case for CSR.
Social partners also play a crucial part in the wider implementation of CSR. Any company strategy towards CSR based on an integrated and balanced approach to economic, social, and environmental factors requires innovative thinking, new skills, and a closer involvement of the social partners.
The term “social responsibility” refers to value-oriented decision and behaviour of the management of a business. Corporate social responsibility (CSR)—also referred to as corporate conscience or corporate citizenship—means a philosophy of self-regulation injected into the running of business. Under CSR self- regulatory mechanism, a business monitors its compliance with the spirit of law, not just the letter, along with compliance with moral and ethical standards and national and international norms of doing business.
Corporate Social Responsibility – Definitions according to Eminent Authors
Many people have defined and discussed the concept of corporate social responsibility. Underlying concepts remaining the same, the definitions vary only in the wordings and the elaborations included in them.
In the Business and Society journal, Archie B. Carrol (1999) traces the history of CSR as a concept, and lists the following definitions:
‘It refers to the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.’ – H.R. Bowen
This very early definition considers CSR as an obligation, to ensure that businesses take such decisions and actions in consonance with the objectives and values of the society.
‘… businessmen’s decisions and actions taken for reasons at least partially beyond the firm’s direct economic or technical interest.’ – Davis
Davis has emphasized the concept of CSR by highlighting the activities that are beyond the normal interests of a company in terms of making profits and technical excellence.
‘Social responsibilities mean that businessmen should oversee the operation of an economic system that fulfills the expectations of the public. And this means in turn that the economy’s means of production should be employed in such a way that production and distribution should enhance total socio-economic welfare. Social responsibility in the final analysis implies a public posture toward society’s economic and human resources and a willingness to see that those resources are used for broad social ends and not simply for the narrowly circumscribed interests of private persons and firms.’ – Fredrick
This definition emphasizes the business activities that enhance total socioeconomic welfare. It also emphasizes the need to look beyond the economic interests of the corporate entity, at broad social needs.
‘The idea of social responsibilities supposes that the corporation has not only economic and legal obligations but also certain responsibilities to society which extend beyond these obligations.’ – McGuire
McGuire talks of looking beyond economic and legal obligations and the need to consider the corporate entity’s responsibilities to society.
‘Social responsibility, therefore, refers to a person’s obligation to consider the effects of his decisions and actions on the whole social system. Businessmen apply social responsibility when they consider the needs and interest of others who may be affected by business actions. In so doing, they look beyond their firm’s narrow economic and technical interests.’ – Davis and Blomstrom
‘In short, the new concept of social responsibility recognizes the intimacy of the relationships between the corporation and society and realizes that such relationships must be kept in mind by top managers as the corporation and the related groups pursue their respective goals.’ – Walton
‘Business is being asked to assume broader responsibilities to society than ever before and to serve a wider range of human values. Business enterprises, in effect, are being asked to contribute more to the quality of American life than just supplying quantities of goods and services. In as much as business exists to serve society, its future will depend on the quality of management’s response to the changing expectations of the public… The inner circle includes the clear-cut basic responsibilities for the efficient execution of the economic function—products, jobs and economic growth. The intermediate circle encompasses responsibility to exercise this economic function with a sensitive awareness of changing social values and priorities, for example, with respect to environmental conservation; hiring and relations with employees; and more rigorous expectations of customers for information, fair treatment, and protection from injury. The outer circle outlines newly emerging and still amorphous responsibilities that business should assume to become more broadly involved in actively improving the social environment, for example, poverty and urban blight.’ – Committee for Economic Development
This definition emphasizes the need for businesses to contribute to the quality of life of the society at large and not merely supply goods and services. The outer circle mentioned here is the realm of CSR whereby the corporate entity is willingly contributing to the improvement of social environment.
‘For purposes of this discussion it (CSR) refers to the firm’s consideration of, and response to, issues beyond the narrow economic, technical, and legal requirements of the firm.’ It is the firm’s obligation to evaluate in its decision-making process the effects of its decisions on the external social system in a manner that will accomplish social benefits along with the traditional economic gains which the firm seeks.
It means that social responsibility begins where the law ends. A firm is not being socially responsible if it merely complies with the minimum requirements of the law, because this is what any good citizen would do.’ – Davies
This definition calls for a consideration by the business entity to look beyond the economics of business. There is a need for larger social actions and a firm should not confine itself to doing good business.
We have seen many definitions of CSR. If we make one of our own, we can write it as follows – CSR is the moral obligation of the corporate entity, while doing ethical business with excellent business acumen to achieve the goals of business in terms of economic gains, technical excellence, and strategies, to look beyond the bottom line and share its prosperity with the society at large for its own good.
Corporate Social Responsibility – Concept
Corporate social responsibility refers to operating a business in a manner that accounts for the social and environmental impact created by the business. It means a commitment to developing policies that integrate responsible business practices with their impact on the society and to report on a regular basis the progress made towards accomplishing business objectives commensurate with such practices.
In the early days, CSR had a connotation of philanthropy. This notion changed to a broader commitment to all stakeholders, including the community in which the business operates. CSR reports now cover a wide range of issues such as – governance, ethics, worker welfare, purchasing and supply chain operations, energy audit, and environmental impact.
According to Debra Dunn, former senior vice-president of Hewlett-Packard (HP), ‘Some people see this work as charity, philanthropy or an allocation of resources that could be better donated by share owners themselves. But to us, it is a vital investment in our future, essential to our top line and bottom-line business success’.
Today, CSR efforts focus on economic, social, and environmental sustainability. While ensuring economic prosperity and creation of wealth, business has the challenge of taking care of the interests of all stakeholders.
In a report, Our Common Future, by the World Commission on Environment and Development in 1987, the Commission defined sustainability as – ‘meeting the needs of the present generation without compromising the ability of the future generation to meet their needs.’ Corporate social responsibility efforts have a close link with sustainability.
There was lack of reporting norms for CSR. The Global Reporting Initiative (GRI) seeks to bring common measures of performance and uniformity in reporting CSR and sustainability initiatives. Adopting of CSR policies and reporting methodologies is still in the early stages of development.
Corporate social responsibility is no longer a ‘may do’ option but an imperative. In developed countries and even in India, there is recognition of this fact by business houses. Many companies have special CSR initiatives, which have helped societies the world over.
Corporate Social Responsibility – Evolution
The state has traditionally taken on the responsibility of providing the national institutional framework to promote both economic progress and equitable social development. However, the ability of the government to fulfil this responsibility is increasingly being challenged by the forces of globalization that are disconnecting networks of production and institutional financial frameworks within the nation state.
Overall, liberalization has strengthened the private sector, as the lowering of trade investment and financial barriers has increased the scope and the mobility of transnational corporations. Evidence is found, for example, in the steady increase in foreign direct investment flows in recent years.
As corporations extend their operations across boundaries in a global market, their activities increasingly fall outside the regulatory reach of individual states. Today, most individual governments have only a limited capacity to hold global private sectors accountable to legal and ethical standards, including assurances that corporations contribute to or at a minimum do not undermine the values of equity, social justice, human rights, and environmental protection.
Most transnational corporations, while often retaining their headquarters in the major cities of industrialized countries, have established mass-production facilities on an immense scale in the countries with weak regulatory institutions, where labour costs are lower and the monitoring of labour, the environment, and other standards is less well established.
Most countries have welcomed direct foreign investment and the growth of transnational corporations has had a direct and wide-reaching impact on the economic and social conditions of a significant share of their populations.
The extent to which transnational corporations now operate outside the regulatory framework of any particular country brings to the fore fundamental questions regarding the obligations or responsibilities of the private sector for promoting general economic growth and social progress, and for maintaining and promoting standards and norms of ethical behaviour.
Apart from contributing to the economic progress of a country through the creation of income and employment, what more should the private sector do? Should a society expect the private sector to care about and contribute to a larger common good? Are such expectations reasonable and can they be achieved? Do they impose too heavy a burden on the private sector? Do they shift too much authority from governments?
It is regularly argued that the primary motivation of corporations should be to make a profit for shareholders, and that responsibility for ensuring that political, economic, and social objectives are met should rest solely with governments. Corporations, it is argued, should be required to obey laws and regulations, pay taxes and maintain labour and environmental standards as they exist, but cannot be responsible for solving social problems, achieving full employment or eradicating poverty.
Yet it can also be argued that the private sector has both a practical need and a certain ethical responsibility for the well-being of the environment in which it operates, based on its own needs for economic and social stability in which to operate, its needs for a skilled and healthy workforce, and the benefits it obtains from reduced governmental regulation.
It could be argued that expanding markets are only sustainable if they are complemented by a social response to ensure a certain degree of equity. At the level of the individual enterprise, it could similarly be claimed that with wealth comes certain responsibilities.
Thus, the private sector in general and transnational corporations in particular might find it in their interests to accept a greater responsibility for promoting an environment conducive to their continuing success.
These opposing views lie in the heart of the current global debate on corporate social responsibility, a debate that has intensified in recent years as a result of the growing attention paid to the social impact of globalization and economic and financial liberalization. The growth of the power and influence of corporations has sparked a reaction asking them to accept commensurately greater responsibilities.
This reaction has come particularly but not exclusively from organizations of civil society, which are working to ensure that corporate activities are socially and environmentally sustainable.
The growing public demand for enhanced corporate social responsibility has been amplified by the current policy orientation in many industrialized countries, which has reduced the role of the public sector in the economic and social spheres of the society; by the increasingly large and unpredictable private capital flows across national boundaries, which have substantially reduced the leverage of governments, particularly of developing countries, in controlling their economic fate; and by the unprecedented period of strong economic growth in large parts of the industrialized world, which has resulted in the spectacular growth of corporate wealth, benefits, and influence in political decision making.
This reaction in turn, created a counter response, particularly, but not exclusively from developing countries, which fear the imposition of new forms of conditionality and see corporate social responsibility as a new form of protectionism and a hindrance to their development.
Many argue that at their stage of development their primary advantage lies in the low wages and flexible regulation that they can offer to entice direct foreign investment by transnational corporations. They view calls for greater corporate social responsibility as thinly veiled attempts to limit their competitiveness and their economic development, and regard it as a luxury affordable mainly by the wealthy countries.
They are joined by many corporations, which are often reluctant to be bound or committed by a concept that they view as unclear in its definitions and its implications, and see it as one that is imposed upon them by a force of public opinion that is essentially amorphous and potentially hostile.
Corporate Social Responsibility – Nature
The nature of social responsibility can be understood as follows:
1. Focus on business firms – Though business and non-business organisations must be equally involved in discharge of responsibilities towards society, the focus is more on business firms to look after the social interest.
2. It deals with the moral issues – Companies have specified policies and programmes for looking after the interests of their employees and non-employees. These programmes emanate from the need to do what is right and just for the society as a whole.
3. It is commensurate with the objective of profit maximization – Social goals are fulfilled by the organisations when they are economically sound. A financially unviable enterprise cannot look after the interests of society. In fact, the increased costs of social responsibility are passed on to consumers in the form of increased prices of goods and services.
4. It is a pervasive activity – Social responsibility is not only the obligation of top level managers but managers at all levels must involve themselves in discharge of social responsibility.
5. It is a continuing activity – Social responsibility is not catering to the interests of society once or twice. It is important for the organisations to continuously engage themselves in social issues if they want to survive and growth in the long run. The economic and the social issues, in fact, go hand in hand.
Corporate Social Responsibility – Importance
There are actually two different types of corporate social responsibility to consider. The first one consists of corporations providing funding and resources for worthwhile social causes, such as donating money or employee time to charities. However, another type of CSR involves putting together a real plan to produce products or provide services that are in the best interests of society.
These include things like using safe materials in design and manufacture, corporate environmental initiatives, and other factors such as job creation and economic development.
The most successful corporate social responsibility programs integrate these two types of CSR together to show a true commitment to a cause. For example, a company that uses sustainable materials in their products, donates financial resources to environmental causes, and allows employees to take paid time off for volunteering at environmental charities would be showing a true commitment to the environment.
One of the reasons that corporations should have visible CSR campaigns is due to the importance and prevalence of social media. Corporations that want to protect their brand understand that social media is an integral part of public perception. When a corporation exercises social responsibility in the form of fundraising or setting up employee giving programs, using social media to promote these actions helps to create a positive branding environment.
Public relations are a potent tool for shaping consumer perception and building a company’s image. Corporations that actively promote their social responsibility activities often take steps to publicize these efforts through the media. Getting the word out about corporate donations, employee volunteer programs, or other CSR initiatives is a powerful branding tool that can build publicity for the organisations in both online and print media.
Corporations that place an emphasis on corporate social responsibility typically have an easier experience when dealing with politicians and government regulators. In contrast, businesses that present a reckless disregard for social responsibility tend to find themselves fending off various inquiries and probes, often brought on at the insistence of public service organisations.
The more positive the public perception is that a corporation takes social responsibility seriously; the less likely it is that activist groups will launch public campaigns and demand government inquiries against it.
Finally, one of the greatest benefits of promoting social responsibility in the workplace is the positive environment the organisation builds for employees. When employees and management feel they are working for a company that has a true conscience, they will likely be more enthusiastic and engaged in their jobs. This can build a sense of community and teamwork which brings everyone together and leads to happier, more productive employees.
Corporate Social Responsibility – 10 Salient Points
CSR refers to the act of balancing profits and social objectives. If a company diverts its funds towards CSR initiatives, it is not treated as expenditure; it is an investment.
The CSR gamut is pervasive and some of salient points of CSR are as follows:
1. Divert funds to CSR and activities and yet maximize the firm’s profit.
2. Identify and execute social responsibility initiatives.
3. Cross the normal domain of thinking on CSR.
4. Innovate or ‘evaporate’.
5. Understand the society and give more than what is expected.
6. Integrate social objectives and business goals.
7. Ensure compliance with legal requirements.
8. Articulate socially valuable objectives.
9. Lead the industry with the best practices.
10. Allow other companies to benchmark one’s company.
Corporate Social Responsibility – How do you Put CSR into Action (With Important Examples)
CSR isn’t about giving money to charity, or just asking people not to print emails for the sake of Mother Earth! First and foremost, businesses exist to make profit, and this isn’t meant to change as a goal. The reality is that no organisation operates in isolation; there is interaction with employees, customers, suppliers and stakeholders. CSR is about managing these relationships to produce an overall positive impact on society, whilst making money.
So how do you put CSR into action?
Below are a few examples of what businesses around the World are doing:
The Body Shop forged a reputation as a responsible business long before it became fashionable. They were one of the first companies to publish a full report on their CSR initiatives thanks to founder Anita Roddick’s passionate beliefs of environmental protection, animal rights, community trade and human rights. The company has gone so far as to start. The Body Shop Foundation, which supports fellow pioneers who would normally struggle to get funding.
Over 20 years ago the company set up a fair trade programme, well before the term ‘Fair Trade’ started to become popular on supermarket shelves. Of course, The Body Shop is famous for its anti- animal testing stance. Whilst this makes testing their products more difficult, especially in markets such as the USA and Japan, their position has created a loyal customer base.
The results? From opening her first store in 1976, 30 years later Annit Roddick’s empire was taken over by L’Oreal for £652m, where it has continued to make annual profits of over £40m.
Moving beyond making cartoons, today the Walt Disney Company additionally owns the ESPN and ABC networks, holiday resorts and publishing businesses to name a few. The result is a lot of social and environmental impact, as well as the ability to influence a huge amount of people.
Importantly, Disney recognised that you can’t entertain a family on the one hand and then disregard the world and circumstances in which they live. Acting responsibly gives the company credibility and authenticity. Accordingly, they have set themselves strict environmental targets and disclose their figures in the Global Reporting Initiative which provides a comprehensive set of indicators covering the economic, environmental and ethical impacts of a company’s performance.
Setting ambitious financial targets together with environmental performance targets may sound like an oxymoron, but Disney has managed to do this with initiatives such as running Disneyland trains on biodiesel made with cooking oil from the resort’s hotels.
They also created the ‘Green standard’ to engage and motivate employees in reducing their environmental impact when working, having meetings, travelling and eating lunch. With more than 60,000 staff, the results are enormous when everyone is pulling in the same direction.
A clear example of financially benefiting from reducing environmental impact is made with this simply statistic- a 10% reduction in the corporation’s electricity use is enough to power the annual consumption of 3 of their theme parks. Whilst their CSR efforts may have taken a great deal of organisation, dedication and investment, 2012 was a record year for Disney’s profits.
This might sound odd at first, but honeybees are an important part of the global food chain as they pollinate one-third of all the food we eat! With numbers lower than ever, this is bad news for companies such as Haagen-Dazs and their all-natural ice creams. To raise awareness, they created a website, started a social media campaign and donated a portion of proceedings to research.
A campaign like works fantastically from a number of different angles. Not only is it helping society as a whole, in keeping with the company’s CSR goals, it helps to show a human side to consumers, which can’t hurt sales. In fact, research shows consumers are more likely to pay a premium for a product linked to a charity donation.
How can CSR translate to a smaller business? The issues are the same, just on a smaller scale. The key is to start by conducting a review of what impacts your business has. This could be from environmental issues (energy use, waste etc.), to how your employees are treated, your supply chain and the local community. Below is a look at some examples a small business would recognize, and could act on.
Corporate Social Responsibility – Approaches
A common approach to CSR is corporate philanthropy. This includes monetary donations and aid given to local and non-local non-profit organisations and communities, including donations in areas such as the arts, education, housing, health, social welfare, and the environment, among others, but excluding political contributions and commercial sponsorship of events.
Some organisations do not like a philanthropy-based approach as it might not help build on the skills of local populations, whereas community-based development generally leads to more sustainable development.
Another approach to CSR is to incorporate the CSR strategy directly into the business strategy of an organisation. For instance, procurement of Fair Trade tea and coffee has been adopted by various businesses including KPMG. Its CSR manager commented, “Fairtrade fits very strongly into our commitment to our communities.”
Another approach is garnering increasing corporate responsibility interest. This is called Creating Shared Value, or CSV. The shared value model is based on the idea that corporate success and social welfare are interdependent. A business needs a healthy, educated workforce, sustainable resources and adept government to compete effectively. For society to thrive, profitable and competitive businesses must be developed and supported to create income, wealth, tax revenues, and opportunities for philanthropy.
Many companies use the strategy of benchmarking to compete within their respective industries in CSR policy, implementation, and effectiveness. Benchmarking involves reviewing competitor CSR initiatives, as well as measuring and evaluating the impact that those policies have on society and the environment, and how customers perceive competitor CSR strategy.
Corporate Social Responsibility – Different Interpretations of CSR
Different persons interpret CSR differently. Some say CSR represents an attempt to get rid of the effects of corporate irresponsibility. Others refer to it as establishing balance between economic and legal responsibility of a business and its ethical and philanthropic responsibility.
Then, there are some who say CSR reflects a company’s responsibility towards community and social and ecological environment. They say CSR is an expression of corporate citizenship through adoption of processes to reduce waste and pollution.
There are also some who say CSR incorporates educational and social programs, or earning adequate return on human, technological and financial resources employed in business.
The Chinese view of CSR means liberal donations to organizations engaged in promotion of arts, education, housing, healthcare, social welfare and environmental protection. It says success of a company and social welfare is interdependent.
Contribution to promotion of quality education and healthcare would turn out educated and healthy workforce, and contribution to environmental protection would minimize loss of resources. However, CSR should exclude donations to political parties or sponsorship of commercial events.
Germans limit CSR to ensuring secure employment, and a permanent source of regular income. The South African view on CSR is positive contribution to social needs such as education and healthcare. Some people hold CSR means monetary contribution and material aid to non-profit organizations and communities.
Corporate Social Responsibility – The Impact of Social Media on Corporate Social Responsibility
In the end, corporate social responsibility, sustainability, and environmentalism, whether they are implemented domestically or globally, are about communication. Marketing professionals who genuinely consider the impact of their business need to listen, consider what they hear, and respond appropriately to the widest group of stakeholders possible.
Social media provide a means for communicating with an enthusiastic group of consumers. Social media allow people to organize, collaborate, and accomplish shared goals in ways that would have been unimaginable several decades ago.
In response, companies have evolved from a reactive state, in which they responded to customer feedback about their CSR-related strategies, to a proactive approach, in which they make their CSR activities known to customers through the various online tools at their disposal.
Social media play an increasingly important role in how companies shape their CSR policies and present themselves as good corporate citizens to consumers and other stakeholders.
To capitalize on the opportunity social media provide, marketers must be consistent in their social media presence and make each digital communication (tweet, Facebook post, etc.,) something of value to their digital community.
The companies leading the way in merging CSR and social media include some of the largest and most successful firms in the world, such as – GE, IBM, and Target. IBM’s Smarter Planet, for example, is a website devoted to communicating the firm’s sustainability initiatives. It uses compelling storytelling that showcases its work in communities and cities around the world.
Meanwhile, GE’s Ecomagination Challenge is a $200 million experiment in which businesses, venture capital firms, entrepreneurs, innovators, and students develop clean energy ideas and submit them for funding.
Target uses social media to further its long-standing commitment to schools and education. Target partnered with Search Institute, a non-profit organization devoted to improving the lives of children, to develop the “Turn Summer Play into Summer Learning” series on its Facebook page.
The campaign provided parents with fun weekly tips about how to keep their child’s mind active during the summer as well as supporting research into how summer learning positively impacts child development.
The series illustrated Target’s commitment to education and promoted the brand in a positive way to consumers. In addition, it allowed Target to connect with parents, including many current and future Target consumers.
Corporate Social Responsibility – Developing a Successful Corporate Social Responsibility Program
The marketing department is typically responsible for developing an organization’s corporate social responsibility program. The process begins when a firm incorporates a focus on fulfilling the economic, legal, ethical, and philanthropic dimensions into its marketing strategy. This focus is often expressed through a formal corporate social responsibility statement.
The task of implementing this type of broad focus through specific action is often difficult, but firms can use the following key elements to guide them through the process:
1. Good stakeholder management:
Marketers should seek significant interaction with the stakeholders who influence the decisions and behavior of the company. For example, Toyota might meet with investors, environmentalists, regulators, and customers to gather ideas for ensuring that the plastic resources used in manufacturing will be discarded in an environmentally friendly way.
The company could also work with the community to understand the impact of water usage by its manufacturing plant on surrounding areas.
2. Good corporate leadership:
The firm’s leaders play a vital role in guiding their organization’s business practices toward social responsibility. Success requires them to demonstrate a unique array of skills and competencies. The emphasis in business thinking has shifted from process to people. Today, leaders who can thoughtfully balance the four dimensions of CSR and communicate their intentions accordingly generally succeed at implementing socially responsible behaviors.
3. Integration of CSR into corporate policy at all levels and in all divisions of the firm:
CSR policies and procedures are most useful when they are written down, well understood, and endorsed by affected employees. These procedures could vary from strategic decisions about the treatment of foreign workers to smaller initiatives such as – establishing procedures that require employees to shut off the lights before leaving work.
Toyota has been able to build strong connections with its stakeholders by focusing on these three key elements as it developed a CSR policy. The company’s shift to a stakeholder-centric approach has brought it observable benefits, including improved customer and employee loyalty at all levels of the company.