Although the runaway train known as Corporate Social Responsibility (CSR) has long since left the station and its global momentum is growing at an unprecedented rate, sufficient time remains for advertising and PR industry holdouts to consider hopping aboard, benefiting themselves and their constituencies in the process.
It remains surprising to see the lingering degree to which the breathtakingly explosive global growth of the CSR marketing movement is still apparently discounted, overlooked or simply dismissed by many in the industry, especially since the origins of CSR date back more than a century.
In the decade since David Vogel’s book The Market for Virtue: The Potential and Limits of Corporate Social Responsibility was published by The Brookings Institution, the global wave of interest in and adoption of CSR endeavors and related media campaigns has been unprecedented. Although the initial growth of CSR initiatives and related advertising campaigns may have been less reliant on choosing to do what seems ethical over what is most profitable in the near-term, the stampede to aggressively promote CSR endeavors as an integral part of corporate marketing strategies has served as a catalyst for embracing socially conscious business pursuits and as a foundational element in business self-regulation.
Since marketers are generally charged with creating positive spin and deflecting negative attention, they are sometimes regarded as manipulative in the way they publicize the actions of their companies, especially where those actions are short-sighted, ill-advised or ill-intentioned or ignorant of the long-term human costs. The adoption and implementation of CSR marketing campaigns provide a means to counter this narrative, by creating opportunities to proactively embrace responsibility for a company’s actions and encourage positive impact through its pro-social activities in regard to the environment, consumers, employees, communities and other stakeholders as opposed to “getting in front of” negative breaking news.
Professor Vogel suggests that two primary factors drive CSR: ethics and profits. He asserts that the degree to which these two factors are complementary fuels the growth of CSR, while the degree to which they are contradictory impedes it. The two factors are not, however, equal in their influence on the ongoing growth and development of CSR. “While profitability may not be the only reason corporations will or should behave virtuously, it has become the most influential,” explains Professor Vogel. “In the final analysis, CSR is sustainable only if virtue pays off.”
In recent years, the comparatively low awareness of and unfavorable attitudes toward CSR that impeded attempts to maximize business benefits from CSR activities have largely given way to highlighting the need for companies to communicate more effectively to stakeholders. One notable exception is Robert Reich’s 2008 working paper, “The Case Against Corporate Social Responsibility,” which argues that interest in CSR “is founded on a false notion of how much discretion a modern public corporation has to sacrifice profits for the sake of certain social goods, and that the promotion of CSR by both the private and public sectors misleads the public into believing that more is being done by the private sector to meet certain public goals than is in fact the case.” CSR advocates counter that corporations should meet the needs not only of shareholders, but of other key stakeholders, including communities, customers, suppliers and employees.
However, Reich’s assertion that corporate reputation has never been more valuable—or more vulnerable—is undoubtedly correct. This is particularly true in light of the corporate malfeasance that so glaringly came to light during the crash, which demonstrated how precious and fleeting reputation is and also served to demonstrate the degree to which one company’s misdeeds can taint an entire industry. With companies today exposed to unprecedented scrutiny through online and mobile media and the 24-hour news cycle, even businesses with superb reputations have sometimes found themselves unfairly lumped within the pack of fraudulent companies.
Reich astutely observes that one of the most important rules of reputation management is the need for constant vigilance. Business today is truly global and information, especially gossip, travels fast. Accordingly, it is easier than ever before to mistakenly equate a company’s reputation with CSR and ethical behavior. Reich also contends that ethics and social responsibility are only two elements in the reputational equation and that financial performance, a harmonious workplace, quality of products and services, corporate leadership and vision also figure into corporate reputational standing. Reich importantly observes that there is also an elusive, emotional bond between a company and its stakeholders that is central to the most enduring reputations and that companies must make reputation management a fundamental part of the corporate culture and value system, spread word of the importance of reputation management throughout the organization, and make employees cognizant of how each of them affects reputation on a daily basis. Reputation must be central to corporate identity and not merely the stuff of advertising campaigns and PR ploys.
In the increasingly distant wake of the 2008-09 economic collapse, and as a result of growing stakeholder expectations that firms make a contribution to society beyond economic benefits, such as products and profits, business is increasingly engaging in non-economic activities to meet these expectations. These non-economic programs include social and environmental initiatives that serve to demonstrate a firm’s commitment to CSR. Corporate image advertising is increasingly being used to create the awareness of a firm’s CSR initiatives, and, in turn, preference for its products and brands.
At its core, CSR is about making ethically and morally correct choices. CSR is essentially an ethical plan tied to understanding the results of a company’s actions within the various communities associated with its brand. The CSR landscape is more critically important today than ever before. Decades ago, the world was run primarily on the basis of sovereignty, with government regulation determining how things were to be run in their respective nations. Government action fundamentally impacted the state of a nation’s economy, and its regulations dictated how a nation’s issues were resolved. While this still remains true in varying degrees on a country-by-country basis, businesses are increasingly playing roles that were formerly the province of governments, as demonstrated in the highly popularized case study in which, as a result of former Apple CEO Steve Jobs’ disdain of Adobe’s Flash, iPods, iPhones and iPads were not made Flash compatible. Although Steve Jobs may not have directly intended this result, his decision in all likelihood indirectly led to the diminishing use of Flash.
The global CSR marketing phenomenon will in all likelihood continue to thunder ahead well into the foreseeable future. All aboard!