Tag Archives: Corporate Responsibility

February 26, 2020 · 6:42 pm

What is Corporate Citizenship?

The corporate citizenship term was typically used to describe the corporations that can contribute to the ethical, philanthropic and societal goals. Therefore, this notion is rooted in political science as it directs corporations to respond to non-market pressures.

Throughout the years, the corporate citizenship agenda has been wrought from distinctive corporate social responsibility (CSR) theories and approaches. Its conceptual foundations can be found in the CSR literature (e.g., Carroll, 1979), corporate social responsiveness (e.g., Clarkson, 1995), corporate social performance (e.g., Albinger & Freeman, 2000), the theory of the firm” (McWilliams & Siegel, 2001), stakeholder engagement (Strand & Freeman, 2013); and other enlightened ‘self-interest’ theories; as corporate citizenship can be a source of opportunity, innovation and competitive advantage (Camilleri, 2017a, 2017b; Porter & Kramer, 2006). For this reason, this concept continues to receive specific attention, particularly by those responsible businesses that are differentiating themselves through responsible and sustainable behaviours.

 

Literature Review

The multinational corporations (MNCs) have been (and still are) under pressure to exhibit “good corporate citizenship” in every country or market from where they run their business. MNCs are continuously monitored by their stakeholders, including regulatory authorities, creditors, investors, customers and the community at large. They are also being scrutinised by academic researchers. Several empirical studies have explored the individuals’ attitudes and perceptions toward corporate citizenship. Very often, their measurement involved quantitative analyses that investigated the corporations’ responsible behaviours (Camilleri, 2017a; 2017b). Other research has focused on the managerial perceptions about corporate citizenship (e.g., Basu & Palazzo, 2008). A number of similar studies have gauged corporate citizenship by adopting Fortune’s reputation index (Flanagan, O’Shaughnessy, & Palmer, 2011; Melo & Garrido‐Morgado, 2012), the KLD index (Dupire & M’Zali, 2018; Fombrun, 1998; Griffin & Mahon, 1997) or Van Riel and Fombrun’s (2007) Reptrak. Such measures expected the surveyed executives to assess the extent to which their company behaves responsibly toward the environment and the community (Fryxell and Wang, 1994).

Despite the wide usage of such measures in past research, the appropriateness of these indices still remains doubtful. For instance, Fortune’s reputation index failed to account for the multidimensionality of the corporate citizenship construct; as it is suspected to be more significant of management quality than of corporate citizenship (Waddock & Graves, 1997). Fortune’s past index suffered from the fact that its items were not based on theoretical arguments as they did not appropriately represent the economic, legal, ethical, and discretionary dimensions of the corporate citizenship construct.

Pinkston and Carroll (1994) identified four dimensions of corporate citizenship, including; orientations, stakeholders, issues and decision-making autonomy. They argued that by observing orientations, one may better understand the inclinations or the posturing behaviours of organisations with respect to corporate citizenship. Pinkston and Carroll (1994) sought to identify the stakeholder groups that are benefiting from the businesses’ corporate citizenship practices. They argued that the businesses’ decision-making autonomy determined at what organisational level they engaged in corporate citizenship. In a similar vein, Griffin and Mahon (1997) combined four estimates of corporate citizenship: Fortune’s reputation index, the KLD index, the Toxic Release Inventory (TRI), and the rankings that are provided in the Directory of Corporate Philanthropy.

Singh, De los Salmones Sanchez and Rodriguez del Bosque (2007) adopted a multidimensional perspective on three domains, including; commercial responsibility, ethical responsibility and social responsibility. Firstly, they proposed that the commercial responsibility construct relates to the businesses’ responsibility to develop high quality products and truthful marketing communications of their products’ attributes and features among customers. Secondly, they maintained that ethical responsibility is concerned with the businesses fulfilling their obligations toward their shareholders, suppliers, distributors and other agents with whom they make their dealings. Singh et al. (2007) argued that ethical responsibility involves the respect for the human rights and norms that are defined in the law when carrying out business activities. They hinted that respecting ethical principles in business relationships has more priority than achieving superior economic performance. Their other domain, social responsibility is concerned about with corporate citizenship initiatives that are characterised by the businesses’ laudable behaviors (Camilleri, 2017c). The authors suggest that the big businesses could allocate part of their budget to the natural environment, philanthropy, or toward social works that supported the most vulnerable groups in society. This perspective supports the development of financing social and/or cultural activities and is also concerned with improving societal well-being (Singh et al., 2007).

Conclusion

There are several actors within a society, including the government and policy makers, businesses, marketplace stakeholders and civil society organisations among others (Camilleri, 2015). It is within this context that a relationship framework is required to foster corporate citizenship practices in order to enhance the businesses’ legitimacy amongst stakeholders (Camilleri, 2017; Camilleri, 2018). The corporate citizenship practices including socially responsible and environmentally sustainable practices may be triggered by the institutional and/or stakeholder pressures.

 

References

Albinger, H.S. & Freeman, S.J. (2000). Corporate social performance and attractiveness as an employer to different job seeking populations. Journal of Business Ethics, 28(3), 243-253.

Basu, K. & Palazzo, G. (2008). Corporate social responsibility: A process model of sensemaking, Academy of Management Review, 33(1), 122-136.

Camilleri, M. A. (2015). Valuing stakeholder engagement and sustainability reporting. Corporate Reputation Review, 18(3), 210-222.

Camilleri, M. A. (2017a). Corporate citizenship and social responsibility policies in the United States of America. Sustainability Accounting, Management and Policy Journal, 8(1), 77-93.

Camilleri, M. A. (2017b). Corporate Social Responsibility Policy in the United States of America. In Corporate Social Responsibility in Times of Crisis (pp. 129-143). Springer, Cham.

Camilleri, M. A. (2017c). Corporate sustainability and responsibility: creating value for business, society and the environment. Asian Journal of Sustainability and Social Responsibility, 2(1), 59-74.

Camilleri, M. A. (2018). Theoretical insights on integrated reporting: The inclusion of non-financial capitals in corporate disclosures. Corporate Communications: An International Journal. 23(4) 567-581.

Carroll, A.B. (1979). A three-dimensional conceptual model of corporate performance. Academy of Management Review, 4(4), 497-505.

Dupire, M., & M’Zali, B. (2018). CSR strategies in response to competitive pressures. Journal of Business Ethics, 148(3), 603-623.

Flanagan, D. J., O’shaughnessy, K. C., & Palmer, T. B. (2011). Re-assessing the relationship between the Fortune reputation data and financial performance: overwhelming influence or just a part of the puzzle?. Corporate Reputation Review, 14(1), 3-14.

Fombrun, C.J. (1998). Indices of corporate reputation: An analysis of media rankings and social monitors’ ratings. Corporate Reputation Review, 1(4), 327-340.

Griffin J.J. & Mahon, J.F. (1997). The corporate social performance and corporate financial performance debate twenty-five years of incomparable research. Business & Society, 36(1), 5-31.

McWilliams, A. & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective, Academy of Management Review, 26(1), 117-127.

Melo, T., & Garrido‐Morgado, A. (2012). Corporate reputation: A combination of social responsibility and industry. Corporate social responsibility and environmental management, 19(1), 11-31.

Pinkston, T.S. & Carroll, A.B. (1994). Corporate citizenship perspectives and foreign direct investment in the US. Journal of Business Ethics, 13(3), 157-169.

Porter, M. E., & Kramer, M. R. (2006). The link between competitive advantage and corporate social responsibility. Harvard business review, 84(12), 78-92.

Strand, R. & Freeman, R.E. (2013). Scandinavian cooperative advantage: The theory and practice of stakeholder engagement in Scandinavia, Journal of Business Ethics, 127(1), 65-85.

Singh, J. & Del Bosque, I.R. (2008). Understanding corporate social responsibility and product perceptions in consumer markets: A cross-cultural evaluation. Journal of Business Ethics, 80(3), 597-611.

Van Riel, C.B. & Fombrun, C.J. (2007). Essentials of corporate communication: Implementing practices for effective reputation management, Routledge, Oxford, UK and New York, USA.

Waddock, S.A. & Graves, S.B. (1997). The corporate social performance-financial performance link, Strategic Management Journal, 18(4), 303-319.

This is an excerpt from one of my contributions that will appear in Springer’s Encyclopedia of Sustainable Management.

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May 19, 2017 · 7:11 pm

A Conceptual Model of Corporate Sustainability and Responsibility

The corporate sustainability and responsibility concept is linked to improvements to the companies’ internal processes, including; environmental management, human resource management, operations management and marketing (Porter & Kramer, 2011; Fombrun, 2005; Maignan & Ferrell, 2004). At the same time, it raises awareness on the businesses’ responsible behaviours toward stakeholders, including the government, suppliers, customers and the community, among others (Carroll & Shabana, 2010; Freeman, 1984). The fundamental motivation behind this approach is the view that creating connections between stakeholders in the value chain will open-up unseen opportunities for the competitive advantage of responsible businesses, as illustrated here:

(Camilleri, 2017a)

Corporate sustainability and responsibility focuses on exploiting opportunities that reconcile differing stakeholder demands as many corporations out there are investing in corporate sustainability and responsible business practices (Camilleri , 2017b). Their active engagement with multiple stakeholders (both internal and external stakeholders) will ultimately create synergistic value for all (Camilleri, 2017a).

Multinational organizations are under increased pressures from stakeholders (particularly customers and consumer associations) to revisit their numerous processes in their value chain activities. Each stage of the company’s production process, from the supply chain to the transformation of resources could add value to their businesses’ operational costs as they produce end-products. However, the businesses are always expected to be responsible in their internal processes, toward their employees or toward their suppliers’ labour force. Therefore, this corporate sustainability and responsibility perspective demands that businesses create economic and societal value by re-aligning their corporate objectives with stakeholder management and environmental responsibility. In sum, corporate sustainability and responsibility may only happen when companies demonstrate their genuine willingness to add corporate responsible dimensions and stakeholder engagement to their value propositions. This occurs when businesses opt for responsible managerial practices that are integral to their overall corporate strategy. These strategic behaviours create opportunities for them to improve the well-being of stakeholders as they reduce negative externalities on the environment.  The negative externalities can be eliminated by developing integrated approaches that are driven by ethical and sustainability principles. Very often, multinational businesses are in a position to mitigate risk and to avoid inconveniences to third parties. For instance, major accidents including BP’s Deep Horizon oil spill in 2010; or the collapse of Primark’s Rana Plaza factory in Bangladesh, back in 2013 could have been prevented if the big businesses were responsible beforehand.

In conclusion, the corporate sustainability and responsibility construct is about embedding sustainability and responsibility by seeking out and connecting with the stakeholders’ varied interests. As firms reap profits and grow, there is a possibility that they generate virtuous circles of positive multiplier effects (Camilleri, 2017a). Therefore, corporate sustainability and responsibility can be considered as strategic in its intents and purposes. Indeed, the businesses are capable of being socially and environmentally responsible ‘citizens’ as they are doing well, economically. This contribution explains the foundations for corporate sustainability and responsibility. Although this concept is still evolving; the debate among academic commentators is slowly but surely raising awareness on responsible managerial practices and on the skills and competences that are needed to deliver strategic results that create value for businesses, society and the environment.

References:

Camilleri, M.A. (2017a) Corporate Sustainability, Social Responsibility and Environmental Management: An Introduction to Theory and Practice with Case Studies. Springer, Heidelberg, Germany. http://www.springer.com/us/book/9783319468488

Camilleri, M.A. (Ed.) (2017b) CSR 2.0 and the New Era of Corporate Citizenship. IGI Global, Hershey, USA. ISBN13: 9781522518426 DOI: 10.4018/978-1-5225-1842-6 http://www.igi-global.com/book/csr-new-era-corporate-citizenship/166426

Carroll, A. B., & Shabana, K. M. (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International journal of management reviews, 12(1), 85-105.

Fombrun, C. J. (2005). A world of reputation research, analysis and thinking—building corporate reputation through CSR initiatives: evolving standards. Corporate Reputation Review, 8(1), 7-12.

Freeman, R.E. (1984). Strategic Management: A stakeholder approach. Pitman, Boston, MA. USA.

Maignan, I., & Ferrell, O. C. (2004). Corporate social responsibility and marketing: An integrative framework. Journal of the Academy of Marketing science, 32(1), 3-19.

Porter, M. E. & Kramer, M. R., (2011). Creating shared value. Harvard business review, 89 (1/2), 62-77.

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January 16, 2017 · 7:31 pm

The Development of Responsible Investing

respinv

Given the growing importance of responsible investing, it could be surprising that there is still no consensus of what the SRI term means to the investors (Sparkes & Cowton, 2004). The roots of the SRI notion can be traced back to various religious movements. Back in 1758, the Religious Society of Friends (Quakers) prohibited members from participating in the slave trade. At the time, one of the founders of Methodism, John Wesley outlined his basic tenets of social investing. He preached about responsible business practices and to avoid certain industries that could harm the health and safety of workers. Hence, the best-known applications of socially responsible investing were initially motivated by religion (Sparkes, 2003). This may well reflect the fact that the first investors to set ethical parameters on investment portfolios were church investors in the U.K., U.S., and Australia (Sparkes & Cowton, 2004). The churches also played a prominent role in the development of ‘ethical’ investment products (Benijts, 2010; McCann, Solomon & Solomon, 2003; Lydenberg, 2002). Sparkes (2001) defined the ethical investments as the exercise of ethical and social criteria in the selection and management of investment portfolios, generally consisting of company shares. However, he argued that ethical investing could have been more appropriate to describe non-profitmaking bodies such as churches, charities, and environmental groups (rather than companies). The author went on to suggest that value-based organisations applied internal ethical principles to their investment strategies.

Very often the ‘ethical investment’ has been considered as perfectly synonymous with the ‘socially responsible investment’ term including in the dedicated academic journals where one might expect that the concepts are clearly defined (Capelle‐Blancard & Monjon, 2012). Schueth (2003: 189) also noted that ‘the terms social investing, socially responsible investing, ethical investing, socially aware investing, socially conscious investing, green investing, value-based investing, and mission-based or mission-related investing all refer to the same general process and are often used interchangeably’. Likewise, Hellsten & Mallin (2006: 393) have used the terms “ethical investments” and “socially responsible investments” interchangeably. However, it may appear that there seems to be a progressive decline in the use of the term ‘ethics’ within the SRI debate. In part, this may reflect the fact that many people felt uncomfortable about using the word ‘ethical’ to describe investment matters. “Any individual or group who truly care about ethical, moral, religious or political principles should in theory, at least want to invest their money in accordance with their principles” (Miller, 1992, p. 248). The original ‘ethical investors’ were church investment bodies. It is only in the past decades that such a perspective has been explicitly reflected in dedicated SRI retail funds (Sparkes & Cowton, 2004). Since their inception in the U.S. (1971) and in the U.K. (1984) the basic model that was used by SRI retail funds has been to base their ‘ethics’ upon an avoidance approach; whereby, responsible investors avoided having shares in unethical companies (Schepers & Sethi, 2003).

 

SRI has evolved during the political climate of the 1960s as socially concerned investors were increasingly addressing equality for women and minority groups (Schueth, 2003). This time was characterised by activism through boycotts and direct action that has targeted specific corporations (Rojas, M’zali, Turcotte & Merrigan, 2009; Carroll, 1999). Yet, there were also interesting developments, particularly when trade unions introduced their multi-employer pension fund monies to targeted investments. During the 70s, a series of themes ranging from the anti-Vietnam war movement to civil rights, to issues related to equality rights for women, have served to escalate the sensitivity to some issues of social responsibility and accountability. These movements broadened to include management, labour relations and anti-nuclear sentiment. Trade unions also sought to leverage pension stocks for shareholder activism on proxy fights and shareholder resolutions (Guay et al, 2004; Gillan & Starks, 2000; Smith, 1996).

In 1971, Reverend Leon Sullivan (at the time he was board member for General Motors) had drafted a code of conduct for the practicing business in South Africa; which became known as the Sullivan Principles (Wright & Ferris, 1997; Arnold & Hammond, 1994; Sullivan, 1983). However, relevant reports that documented the application of the Sullivan Principles revealed that the US companies did not lessen their discrimination toward the native South African people. Thus, there were US investors as well as large corporations who have decided to divest from these ‘irresponsible’ companies. In 1976, the United Nations has also imposed a mandatory arms embargo against South Africa (Nayar, 1978). The ranks of the socially concerned investors had grown dramatically through the 1980s as millions of people, churches, universities, cities and states were increasingly focusing their pressures on the white minority government (of South Africa) to dismantle the racist system. The subsequent negative flow of investment eventually forced a group of businesses, representing 75% of South African employers, to draft a charter calling for an end to the apartheid. While the SRI efforts alone did not bring an end to discrimination, it has mounted persuasive international pressure on the South African business community.

Advances in the SRI agenda were being made in other contexts. By 1980 presidential candidates; Jimmy Carter, Ronald Reagan and Jerry Brown advocated some type of social orientation toward investments in pension funds (Gray, 1983; Barber, 1982). Afterwards in the mid to late 1990s there were health awareness campaigns that effected the tobacco stocks in the US (Krumsiek, 1997). For instance, the California State Teachers’ Retirement System (CalSTRS) removed more than $237 million in tobacco holdings from its investment portfolio after 6 months of financial analysis and deliberations (Reynolds, Goldberg & Hurley, 2004). Arguably, such a divestment strategy may have satisfied the ethical principal of non-harming, but did not necessarily create a positive social impact (Lane, 2015).

During the late 1990s, SRI had also focused on the sustainable development of the environment (Richardson, 2008; Brundtland, 1989). Many investors started to consider their environmental responsibility following the Bhopal, Chernobyl and Exxon Valdez incidents. The international media began to raise awareness on the global warming and on the ozone depletion (Pienitz & Vincent, 2000). It may appear that the environmental protection and climate change issues were becoming important issues for many responsible investors. However, it may appear that businesses have failed to become more sustainable in their ecological dimension as the human ecological footprint exceeds the Earth’s capacity to sustain life by 60% (Global Footprint Network, 2016). At the same time, global resource consumption and land degradation is constantly impacting on the natural environment; as arable land continues to disappear. Evidently, the world’s growing populations and their increased wealth is inevitably leading to greater demands for limited and scarce resources. These are some of the issues that have become somewhat important rallying points for many institutional investors.

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July 11, 2016 · 12:06 pm

The Responsible Supply Chain Management and its effect on Corporate Reputation

supply chain(image source: Carlson School of Management, University of Minnesota)

 

Corporate reputation has often been defined as “a set of attributes ascribed to a firm, that is inferred from the firm’s past actions” (Weigelt & Camerer, 1988, p. 443). Fombrun and Shanley (1990) argued that reputation “signals publics about how a firm’s products, jobs, strategies and prospects compare to those of competing firms” (p. 233). The value of reputation has been subject to extensive research, which has highlighted that reputation influences the stakeholders’ perceptions (Money, Hillenbrand & Downing, 2011), the customers’ choices and their purchase intentions (Keh & Xie, 2009; Siegel & Vitaliano, 2007; Mohr & Webb, 2005) Therefore, corporate reputation is related to corporate financial performance (Camilleri, 2012; Flanagan, O’Shaughnessy, & Palmer, 2011). Much of the work on corporate social–financial performance also implicitly assumes that this relationship is positive, because an improved reputation facilitates revenue and profit growth (Orlitzky et al., 2003; Surroca, Tribó & Waddock,. 2010).

Extant work suggests that reputation is important because it establishes credibility (Greyser, 1999; Herbig et al., 1994). The notion that reputation is related to credibility has also been noted in the wider corporate social (and environmental) responsibility literature. McWilliams and Siegel (2001) argued that building a reputation of ‘responsibility’ can signal an improved reputation (Husted & Allen, 2007; Brammer & Millington, 2005; McWilliams & Siegel, 2001; Fombrun & Shanley, 1990). Hence, responsible corporate behaviour “builds trust and enhances the firm’s reputation, which in turn attracts customers, employees, suppliers and distributors, not to mention earning the public’s goodwill” (Lantos, 2001, p. 606). In a similar vein, Lewis (2003) also held that responsible behaviours can establish trust and ultimately develop a company’s reputation. Social and environmental activities not only can enhance the reputation of the firm, but also enhance the goodwill trust of stakeholders (Carlisle and Faulkner, 2005; Siltaoja, 2006).
Therefore, corporate reputation is fundamentally a signal to stakeholders (Ponzi, Fombrun & Gardberg, 2011) and is particularly important in markets where there is imperfect information (Hoejmose et al., 2014.; Weigelt & Camerer, 1988). The market signals, including engagement in social and environmental issues could help to improve corporate image (McWilliams & Siegel, 2001; Bagnoli & Watts, 2003).

Markley and Davis (2007) also noted that responsible behaviours could send positive market signals to a range of stakeholders. Today’s firms are expected to implement responsible supply chain practices. If they won’t they run the risk of damaging their reputation and image among their stakeholders. Hence, there is scope for firms to implement socially and environmentally responsible practices in their supply chains (Ansett, 2007). Responsible supply chain management encapsulates social issues (e.g. child labour, working conditions, human rights et cetera) and / or environmental matters (e.g. environmental protection, waste management, recycling, reusing natural resources et cetera) (Hoejmose et al., 2013; Carter & Rogers, 2008; Seuring & Muller, 2008). Such responsible behaviours shield the firms from negative media attention and consumer boycotts (Hoejmose et al., 2013). The companies’ stronger engagement in socially responsible supply chain management enables them to manage exposure to risk (Tate et al, 2010; Van De Ven & Jeurissen, 2005). Thus, the businesses’ stakeholder engagement and their responsible procurement of materials and products is linked to corporate reputation, which in turn allows them to target discerning customer groups (Phillips & Caldwell, 2005; Roberts, 2003).

Kleindorfer, Singhal, and Wassenhove (2005) suggested that responsible supply chain practices can lead to increased profitability, as customer satisfaction and loyalty will improve as a result of a stronger reputation. Therefore, firms risk losing customers to rival companies over time, particularly if they fail to be responsible in their supply chain. In fact, Harwood & Humby (2008) findings suggested that suppliers were adhering to specific corporate social responsibility (CSR) requirements in order to reduce their exposure to risk. It may appear that the real value of social and environmental management is perhaps not from its role in enhancing reputation, but more about protecting it. This reflects Burke’s (2011) argumentation as he suggested that a firm’s corporate reputation is enhanced through positive actions, the programmes they implement and the other tangible things that they do.

Therefore, the distinction between reputation protection and enhancement is subtle, but important. Corporate reputation protection is concerned with evidencing the firms’ efforts to meeting the stakeholders’ expectations, whilst reputation enhancement goes beyond a purely evidential basis to encompass embedded practice. Corporate reputation protection occurs when firms can prove to stakeholders that they took reasonable steps to prevent an incident from happening (Coombs, 2014). In fact, corporate reputations could be easily jeopardised by irresponsible supply chain practices which may “directly harm business contracts, marketing, and sub-sourcing, and damage the corporation’s brands and the trust they have established with their business customers” (Lee & Kim, 2009, p. 144). These companies’ failure to manage their supply chain in a responsible manner could result in negative repercussions for their organisational performance. Conversely, the corporations’ reputation and credentials in socially responsible supply chain management could lead them to achieve a competitive advantage (Ansett, 2007; McWilliams et al., 2006).

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August 15, 2015 · 4:52 pm

Unleashing Corporate Social Responsibility through Digital Media

csr

Companies are increasingly focusing their attention on content and inbound marketing. In a nutshell, content marketing necessitates an integrated marketing communications approach involving different media (1). Content strategists and marketers who care about their online reputation are realising that they have to continuously come up with fresh, engaging content with a growing number of quality links. They have to make sure that their websites offer great content for different search engines. Consistent high quality content ought to be meaningful and purposeful for target audiences (2).

Successful marketers are capable of enhancing customer loyalty, particularly if their businesses are delivering ongoing value propositions to promising prospects (on their website). Such businesses are continuously coming up with informative yet interesting content through digital channels, including blogs, podcasts, social media networking and e-newsletters. Online content often include refreshing information which tell stakeholders how to connect the dots. It may appear that many companies are becoming quite knowledgeable in using social media channels to protect their reputation from bad publicity or misinformation.

Several online businesses often tell insightful stories to their customers or inspire them with sustainable ideas and innovations. Corporate web sites could even contain their latest news, elements of the marketing-mix endeavours as well as digital marketing fads.
Most social media networks are effective monitoring tools as they could feature early warning signals of trending topics (3). These networks may help business communicators and marketers identify and follow the latest sustainability issues. Notwithstanding, CSR influencers are easily identified on particular subject matters or expertise. For example, businesses and customers alike have also learned how to use the hashtag (#) to enhance the visibility of their shareable content (4). Some of the most popular hashtags comprise: #CSR #StrategicCSR, #sustainability, #susty, #CSRTalk, #Davos2015, #KyotoProtocol, #SharedValue et cetera. Hashtags could possibly result in financial support to charity, philanthropic or stewardship principles. They may even help to raise awareness of the overall CSR communications. Hence, there are numerous opportunities for businesses to leverage themselves through social networks as they engage with influencers and media.

  • The ubiquity of Facebook and Google Plus over the past years has made them familiar channels for many individuals around the globe. These networks have become very popular communication outlets for brands, companies and activists alike. These social media empower their users to engage with business on a myriad of issues. They also enable individual professionals or groups to promote themselves and their CSR credentials in different markets and segments.
  • Moreover, Linkedin is yet another effective tool, particularly for personal branding. However, this social network helps users identify and engage with influencers. Companies can use this site to create or join their favourite groups on LinkedIn (e.g. GRI, FSG, Shared Value Initiative among others). They may also use this channel for CSR communication as they promote key initiatives and share sustainability ideas. Therefore, LinkedIn connects individuals and groups as they engage in conversations with both academia and CSR practitioners.
  • In addition, Pinterest and Instagram enable their users to share images, ideas with their networks. These social media could also be relevant in the context of the sustainability agenda. Businesses could illustrate their CSR communication to stakeholders through visual content. Evidently, these innovative social networks provide sharable imagery, infographics or videos to groups who may be passionate on certain issues, including CSR.
  • Moreover, digital marketers are increasingly uploading short, fun videos which often turn viral on internet (5). Youtube, Vimeo and Vine seem to have positioned themselves as important social media channels for many consumers, particularly among millennials. These sites offer an excellent way to humanise or animate  SR communication through video content. These digital media also allow their users to share their video content across multiple networks. For instance, videos featuring university resources may comprise lectures, documentaries, case studies and the like.

CSR practices may provide a good opportunity for businesses to raise their profile in the communities around them.  Genuine businesses communicate their motives and rationales behind their CSR programmes. In this case, there are numerous media outlets where businesses can obtain decent coverage of their CSR initiatives, especially on the web (e.g. CSRwire and Triple Pundit among others). Although, there are instances  where consumers themselves, out of their own volition are becoming ambassadors of trustworthy businesses; at the same time certain stakeholders are becoming increasingly acquainted and skeptical on certain posturing behaviours and greenwashing (6).

Generally, digital communications will help to improve the corporate image of firms. Positive publicity can lead to reputational benefits and long lasting relationships with stakeholders (7). Online content and inbound marketing can be successfully employed for CSR communication1. Corporate sites should be as easy as possible, with user-centred design that enables interactive information sharing on CSR activities. Inter-operability and collaboration across different social media can help businesses to connect with stakeholders (1). 

Marketers can create a forum where prospects or web visitors can engage with the business in real time. These days, marketing is all about keeping and maintaining a two-way relationship with consumers. Digital marketing is an effective tool for consumer engagement.

A growing number of businesses are learning how to collaborate with consumers about product development, service enhancement and promotion. These companies are increasingly involving customers in all aspects of marketing. They listen to and join online conversations as they value their stakeholders’ opinions and perceptions.

Today, pervasive social media networks are being used by millions of customers every day. In a sense, it may appear that digital marketing tools have reinforced the role of public relations. These promotional strategies complement well with CSR communication and sustainability reporting.

This contribution encourages businesses to use digital media to raise awareness of their societal engagement and environmentally sustainable practices. Further research may possibly identify how successful businesses are using digital channels to forge genuine relationships with their stakeholders.

References

  1. Camilleri, M.A. “Unleashing Shared Value Through Content Marketing.” Triple Pundit, 10th February 2014. http://www.triplepundit.com/2014/02/unleashing-shared-value-content-marketing/
  2. Camilleri, M.A. “A Search Engine Optimization Strategy for Content Marketing Success.” Social Media Today 28th May, 2014. http://www.socialmediatoday.com/content/search-engine-optimization-strategy-content-marketing-success
  3. Kietzmann, Jan H., Kristopher Hermkens, Ian P. McCarthy, and Bruno S. Silvestre. “Social media? Get serious! Understanding the functional building blocks of social media.” Business horizons 54, no. 3 (2011): 241-251.
  4. Small, Tamara A. “What the hashtag? A content analysis of Canadian politics on Twitter.” Information, Communication & Society 14, no. 6 (2011): 872-895.
  5. Guadagno, Rosanna E., Daniel M. Rempala, Shannon Murphy, and Bradley M. Okdie. “What makes a video go viral? An analysis of emotional contagion and Internet memes.” Computers in Human Behavior 29, no. 6 (2013): 2312-2319.
  6. Laufer, William S. “Social accountability and corporate greenwashing.” Journal of Business Ethics 43, no. 3 (2003): 253-261.
  7. Camilleri, M.A. “The Business Case for Corporate Social Responsibility” (paper presented at the American Marketing Association in collaboration with the University of Wyoming, Oklahoma State University and Villanova University: Marketing & Public Policy as a Force for Social Change Conference. Washington D.C., 5th June 2014): 8-14, Accessed June 26, 2015. https://www.ama.org/events-training/Conferences/Documents/2015-AMA-Marketing-Public-Policy-Proceedings.pdf

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October 23, 2014 · 10:44 am

National Governments’ Regulatory Roles in Corporate Sustainability and Responsibility

The governments are usually considered as the main drivers of CSR policy. However, there are other actors within society, such as civil organisations and industry. It is within this context that a relationship framework has been suggested by Mendoza (1996) and Midttun (2005). Inevitably, it seems that there was a need for a deeper understanding of the governments’ role and function in promoting CSR. Societal governance is intrinsically based on a set of increasingly complex and interdependent relationships. There are different expectations and perceptions within each stakeholder relationship, which have to be addressed to develop an appropriate CSR policy. Essentially, this relational approach is based on the idea that recent changes and patterns affecting the economic and political structure may transform the roles and capacities of various social agents (Albareda et al., 2009). The exchange relationships among different actors and drivers which are shaping CSR policy and communications are featured hereunder in Figure 1.

Figure 1

According to Golob et al. (2013) CSR communication is concerned with the context / environment within which CSR communication practices take place. The authors went on to say that it is necessary to observe CSR communication processes between organisations, (new) media and stakeholders. Apparently, several governments have chosen to draw business further into governance issues without strictly mandating behaviour and specifying penalties for non compliance. For example, the UK government’s Department Innovation and Skills, DBIS website states: “The government can also provide a policy and institutional framework that stimulates companies to raise their performance beyond minimum legal standards. Our approach is to encourage and incentivise the adoption of CSR, through best practice guidance, and where appropriate, intelligent (soft) regulation and fiscal incentives”, (DBIS, 2013).

Similarly, in the context of high unemployment levels and social exclusion in Denmark, Ms Karen Jesperson, the Minister of Social Affairs (2003) had unveiled the campaign entitled, “It concerns us all”, which drew attention to the ways in which CSR could assist in addressing public policy problems (Boll, 2005). In a similar vein, the Swedish governments’ CSR initiative had called on the companies’ commitment in upholding relevant international standards. In Australia, the former prime minister, John Howard had formed the Business Leaders’ Roundtable as a means of encouraging business leaders to think about how they could assist government in solving the social problems (Crane et al., 2009). Arguably, the governments can facilitate CSR implementation by setting clear frameworks which guide business behaviour, establishing non-binding codes and systems, and providing information about CSR to firms and industries. For instance, the UK and Australian governments came up with the notion of CSR as a response to mass unemployment. They set public policies which have encouraged companies to engage in CSR practices by providing relevant work experience and training opportunities to job seekers (see Moon and Richardson 1985, Moon and Sochacki, 1996). Similarly, the EU institutions have frequently offered trainee subsidies and grants for education, including vocational training for the companies’ human resources development (EU, 2007). Governments’ role is to give guidance on best practice. Japan is a case in point, where there are close relationships between government ministries and corporations. The firms in Japan report their CSR practices as they are required to follow the suggested framework of the Ministry of Environment (Fukukawa and Moon, 2004). Apparently, there is scope for the respective governments to bring their organisational, fiscal and authoritative resources to form collaborative partnerships for CSR engagement. National governments may act as a catalyst in fostering responsible behaviours.

For instance, India has taken a proactive stance in regulating CSR as it enforced corporate spending on social welfare (India Companies Act, 2013). With its new Companies Bill, India is pushing big businesses to fork out at least two per cent of their three year annual average net profit for CSR purposes. Clause 135 of this bill casts a duty on the Board of Directors to specify reasons for not spending the specified amount on CSR (EY, 2013). It mandates companies to form a CSR committee at the board level. The composition of the CSR committee has to be disclosed in the annual board of directors’ report. The board will also be responsible for ensuring implementation of CSR action plan. The annual Director’s Report has to specify reasons in case the specific amount (2% of the Profit after Tax) has not been utilised adequately. IB (2014) has recently estimated that around 8,000 companies in India will be shortly accounting for CSR-related provisions in their financial statements. These provisions would closely translate to an estimated discretionary expenditure between $1.95 billion to $2.44 billion for CSR activities. In a similar vein, the European Parliament passed a vote to require mandatory disclosure of non-financial and diversity information by certain large companies and groups on a ‘report or explain’ basis. This vote amended Directive 2013/34/EU and affects all European-based ‘Public Interest Entities’ (PIEs) of 500 employees or more as well as parent companies (EU, 2014).

 

This is an extract of a paper that will appear in the Corporate Reputation Review, Vol. 18 (2).

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