MGT_VII

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Course Learning Outcomes for Unit VI At the end of this unit, you should be able to:

4. Determine corporate social responsibility in business. 4.2 Evaluate the ways this ethical decision supports corporate social responsibility.

6. Explore the implications of competitiveness and collaboration in a global economy.

6.1 Evaluate the ways in which an organization’s commitment to corporate social responsibility impacts customers and sales.

Required Unit Resources Article: Impact of Global Brand Chief Marketing Officers' Corporate Social Responsibility and Sociopolitical Activism Communication on Twitter (ULO 4.2, 6.1) This article explores how chief marketing officers demonstrate their corporate social responsibility actions on Twitter and how they are perceived (10 pages). Article: The Impact of Corporate Social Responsibility on Brand Sales: An Accountability Perspective (ULO 4.2, 6.1) This article explores the ways corporate social responsibility affects consumers and purchasing decisions (24 pages). Article: Corporate Social Responsibility (CSR) Implementation: A Review and a Research Agenda Towards an Integrative Framework (ULO 4.2, 6.1) This article reviews the current literature regarding corporate social responsibility, strategies for implementation, and areas for further research (17 pages). Unit Lesson Lesson (ULO 4.2, 6.1): Components of Corporate Social Responsibility The Unit VI Lesson will cover the topics of corporations and entitlement. Regardless of a firms’ size, the activities, trust, and representation should be that of professionalism through providing an environment that is socially supportive and ethically responsible and accountable. Many organizations are aware of the essence of giving back, but some still struggle with social responsibility, while others feel their company is not large enough to take on this task. Regardless of a company’s size or the volume of accounts, sales, and profits, all organizations can and should give back in one way or another and support worthy causes. This type of philanthropy is known as corporate social responsibility (CSR). This lesson will share the meaning, understanding, importance of CSR and the role and impact corporations have as a guiding coalition of responsibility and accountability for now and the foreseeable future. CSR has multiple meanings, and perception may vary, but the base understanding is a self-regulation to simply give back by creating and supporting societal environmental issues. Giving back and supporting causes are justifiably a natural act of caring, empathizing, and promoting causes to raise awareness of a need and in some cases a want. In the late 1800s, social responsibility was a goodwill service, but it has

UNIT VI STUDY GUIDE Corporate Social Responsibility

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evolved to be a booster on which companies capitalize to reap profits while satisfying the community demands of corporate citizenship. CSR, for most, is a paradigm shift from a face-saver to a prominence expectation, regardless of the organizations size. Companies have many variances such as the number of employees, the volume of sales, or the classification of profit or not-for-profit, yet size is not a factor in giving back and supporting worthy causes. When CSR is the norm, it benefits all parties involved. For companies, CSR builds a solid reputation of supporting worthy causes, which in turn, affects their status quo of prominence, profits, and an awareness to the environment. Companies also reap internal benefits, such as employee involvement, that builds morale and association with the employees and satisfaction gleaned from a feeling of supporting a worthy cause. For the cause being supported, the marketing value of association builds relationships with the origin company as well as possible support and collaboration with other organizations, which in turns brings forth a greater awareness of the needs and support of the worthy causes.

Strategy All companies, regardless of their size or years in the business, can benefit from the marketing and branding of a genuine, authentic CSR strategy. Strategies maximize the organizational strengths and minimize competitors’ strengths: basic business principles. Upshaw (2021) states that an effective strategy is driven by goals that are both measurable and authentic. Strategies are plans or methods based upon organizational goals that are aligned with a company’s values, purpose, brand, and culture. Goals are benchmark measurements of achievement or continuous assessments that strive for optimal performance. Remember the SMART (specific, measurable, attainable, realistic, and timely) goals from the previous lesson. They are an absolute in setting forth organizational goals. Goal-driven CSR strategies ensure company support and buy-in, producing a stronger return on investing and accountability of social responsibility. All goals may not exactly relate to each step in setting SMART goals, but each goal should be rooted in the company’s brand and culture. All goals aligned to the organizational strategy must be authentic or the risk rises in losing credibility that may negatively affect all good intentions of CSR. One note to mention that should not be overlooked in creating goals and strategies is the importance of basing each criterion upon high ethical standards regardless of adopting a CSR policy.

Understanding the Importance of Corporate Social Responsibility The importance of CSR continues to grow, and for most companies, it is not a question of importance but rather a discussion of committing to several activities that support multiple CSR initiatives! In 2016, Cone Communications conducted a survey entitled “Millennial Employee Engagement Study” in which over half (64%), stated they would not accept a position for a company that does not have strong CSR values. A different survey by Cone Communication asked of the public resulted in 77% stated they are more likely to shop from companies who are committed to improving the world (Friemann, n.d.). There is no denying the importance of the difference CSR makes in companies and with consumers. The ISO 26000 Stakeholders Global Network (as cited in Friemann, n.d.) has developed a framework that incorporates several clauses. Clause 4 includes seven principles of social responsibility as shown in the graphic below.

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Each of the seven fundamentals are power nouns that define an action, reflection, or approach, and each are core components of CSR. Taking action that helps and supports others embellishes societal advancement, which is a huge responsibility. Other corporations are more focused on the bottom line of profit with little consideration to societal responsibility. The four approaches that define the depth of accountability in social responsibility are obstructive, defensive, accommodating, and proactive.

Four Approaches to Corporate Social Responsibility

(adapted from Freepik, n.d.)

The first two approaches focus more on profit than social responsibility. A company taking an obstructive stance tends to focus more on the economic priorities and profitability over CSR. Obstructive businesses are often viewed as immoral due to how they treat their employees, customers, and the environment (Kanobi,

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2018). Companies that have a defensive stance usually do not hold themselves accountable and are neutral between profits and actions in a socially responsible environment, always staying a tad above the law. The latter two, accommodating and proactive, focus more on social responsibility along with being profitable. Accommodating companies balance the importance of both social responsibility and profits. Their actions are not affected by assessments and opinions yet satisfy all legal requirements and ethical standards. The proactive company prioritizes social responsibility, even if the stance affects their profits. Often, their mission or vision statement supports the company’s values. CSR is a broad concept and has different meanings to organizations. The base for any company is operations, the sustainable manner will vary economically, environmentally, and socially. Keep in mind, an organizations stance reflects the values of a company and their respective employees.

Levels of Social Responsibility CSR are strategies that companies use to act upon as part of their organizational governance that are designed to establish ethics and support worthy causes that make a difference internally and externally. Among the many representations and endless opportunities, there are four levels of social responsibility: economic responsibility, legal responsibility, ethical responsibility, and philanthropic responsibility (Birt, 2022). Each of the levels is organized hierarchically in order of importance in an effort to balance the self-interest of profits with the virtuous acts of social responsibility of organizations. This element is known as the pyramid of corporate social responsibility.

The Pyramid of Corporate Social Responsibility The CSR pyramid represents the concept that businesses have a responsibility to do good by self-regulating their actions and to be socially accountable to their employees, customers, stakeholders, and the world. The four progressions displayed in the image below show the common denominator of responsibility.

In today’s world, the goal is for companies to give back and support others for the greater good while keeping profit in mind but also positively impacting the economy. Economic responsibility involves making financial decisions that prioritize doing good. Using sustainable materials regardless of the cost or using a transparent salary system that fairly compensates all employees regardless of their gender and race are examples of economic responsibility (Birt, 2022).

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Legal responsibility ensures companies are following all local, state, and federal laws and regulations. Legal responsibility demonstrates that companies are closely examining and auditing records to always meet each legal regulation and compliance. Common law ensures companies are following tax regulations, employees’ health and safety laws, and competition laws (Birt, 2022). Ethical responsibility means companies are engaged in fair business practices; treat employees, stakeholders, and customers with the upmost respect; and avoid negative associations or questionable incidents (Birt, 2022). A best practice of ethics and ethical responsibility is to always do the next right thing! Today’s business environment and people in general expect that most businesses give back and support others, including communities. During the last few years of the COVID-19 pandemic, many businesses were struggled financially and were unable to give like they did in better economic times. In the past, the philanthropic responsibility has mostly been held under the larger corporations’ responsibilities. Some multi- millionaires have committed to giving most of their fortune away before their deaths. Other millionaires, including company chief executive officers, have committed to giving back portions of their profits. Smaller businesses are giving back in multiple ways: bonuses, pay raises, paid vacations, stocks, bonds, and more. The donations are all tokens of appreciation and support of worthy causes and benefits. To make money and be profitable is business, but to give back and help others is a blessing. CSR is an imperative, valuable tool and is often used as a boost to public relations and competitiveness. CSR organizational benefits are stronger brand imaging and brand equity by relating the organization name to the initiative; customer loyalty through business-to-consumer buying power; cost saving through operational effectiveness; employee retention from service and servant leadership; commitment and buy-in supporting the initiatives represented by the organization; and potential stronger investor, stakeholder, and shareholder interests. From a community and employee perspective, organizational CSR increases employee engagement, moral, and participation. Additionally, it supports and serves an array of local and global communities, public relations opportunities through brand recognition, customer retention from associating their buying power to companies that support and represent CSR initiatives. In conclusion, enjoy a few well- known companies who have and continue to excel at CSR. Consider the following examples from Gavin (2019). Starbucks launched their first corporate social responsibility report in 2020 with the goal of becoming as well-known for their CSR initiatives as they are for their coffee. Google committed to charity programs through Google.org and has already given over $100 million in grants and investments. Additionally, in 1991, Levi Strauss created its Terms of Engagement global code of conduct regarding their supply chain and worker rights to a safe work environment and environment- friendly production process. Finally, Lego’s commitment to sustainability states, by 2030, the toymaker plans are to use environmentally friendly materials to produce all their products, including packaging!

References Birt, J., (2022, September 30). 4 levels of corporate social responsibility (CSR). Indeed.

https://www.indeed.com/career-advice/career-development/corporate-social-responsibility-levels Fatima, T., & Elbanna, S. (2023). Corporate social responsibility (CSR) implementation: A review and a

research agenda towards an integrative framework. Journal of Business Ethics, 183(1), 105–121. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=161898122&site=ehost-live&scope=site

Freepik. (n.d.). Flat design infographic steps [Graphic]. Freepik. https://www.freepik.com/free-vector/flat-

design-infographic- steps_5939817.htm#query=step%20infographic&position=4&from_view=search&track=ais

Friemann, E. (n.d.). What are the 7 principles of corporate social responsibility (CSR)? Rumie.

https://learn.rumie.org/jR/bytes/what-are-the-7-principles-of-corporate-social-responsibility-csr Gavin, M., (2019, June 6). 5 examples of corporate social responsibility that were successful. Business

Insights. https://online.hbs.edu/blog/post/corporate-social-responsibility-examples

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Kanobi, B. (2018, June 27). What are the four basic approaches to social responsibility? Classroom. https://classroom.synonym.com/what-are-the-four-basic-approaches-to-social-responsibility- 12083190.html

Nickerson, D., Lowe, M., Pattabhiramaiah, A., & Sorescu, A. (2022). The impact of corporate social

responsibility on brand sales: An accountability perspective. Journal of Marketing, 86(2), 5–28. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=155817139&site=ehost-live&scope=site

Özturan, P., & Grinstein, A. (2022). Impact of global brand chief marketing officers’ corporate social

responsibility and sociopolitical activism communication on Twitter. Journal of International Marketing, 30(3), 72–82. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=158419221&site=ehost-live&scope=site

Upshaw, T. (2021, September 17). Your CSR strategy needs to be goal driven, achievable, and authentic.

Harvard Business Review. https://hbr.org/2021/09/your-csr-strategy-needs-to-be-goal-driven- achievable-and-authentic