assignment csr and marketing approaches

Assignment

“Corporate Social Responsibility and Marketing Approaches/Strategies”

1- CSR and Strategies to integrating CSR with Marketing----------------2 Three Approaches to integrating CSR with marketing CSR and Marketing Approaches/ Strategies prospects

2- CSR and Marketing Approaches/Strategies according to Case studies------5

Four Social Philosophies and Corporate Social Responsibility~ Approaches and Issues for Companies:

Four Case Studies on Corporate Social Responsibility: Do Conflicts Affect A Company’s Corporate Social Responsibility Policy?

Why Every Company Needs a CSR Strategy and How to Build ItOrganizing for CSR Strategy Development

Must Milton Friedman Embrace Stakeholder Theory?

Assignment Prepared by: Maaz Rashid 03459113521

Assignment Submitted to: Respectable Prof.Razaullah

of 13Corporate Social Responsibility------Maaz Rashid-----Prof.Razaullah

1- CSR and Strategies to integrating CSR with Marketing

Corporate Social Responsibility means that as charitable giving/contribution, strategic philanthropy, community involvement, or cause related marketing.

Corporate social responsibility involves doing business in a responsible way that delivers value not only to the organization, but also to its stakeholders and the community within which it operates.

Corporate social responsibility covers five 5 areas.

1- Environment2- Community3- Employee welfare4- Financial performance5- Corporate governance

Three Approaches to integrating CSR with marketing

That’s may be difficult for company to make control on positioning of brand and CSR strategies.

The only way for a company to achieve such positioning of brand and CSR strategies, needs to bring their CSR and Marketing departments together to define approaches.

The Integrated Approach The Selective Approach The Invisible Approach

The Integrated Approach

In this approach, the brand and CSR operates in a same manner. That’s applicable when market study/investigation shows responsible business practices to be a key driver of brand preference.

The core strength of this approach is that companies with the right business model can show a unified convincing level across all touchpoints (Buyer & Seller contacting point). It means that a consistent performance across environment, community, employee welfare, financial performance and corporate governance commitments.

The company promise is all about sustainability, business brand CSR strategy are directly linked. CSR strategy sets the standards for the products, it carries, the way they sold, the way it treats its employees.


Company employees known as team members are encouraged to participate in charitable activities in operation time. The result of this integrated strategy are proof to be success and with double-digits growth rates over periods.

The Selective Approach

The selective approach is effective either when market research shows responsible business practices make first choice.

A core advantage of the selective approach is that it can provide an effective means of differentiation in competitative market while shielding the parent brand from customers/stakeholders criticism (backlash) i.e. middle class, high quality products.

The Invisible Approach

In this approach, CSR may play an important strategic or philosophical role in guiding the company, but plays a very limited role in external communications and initiatives.

This allows companies to use CSR as an asset to support (bolster) trust in their brand and company.

This option a company who have CSR initiatives become part of companies mainstream communication differentiate from others.

A Company deeply serious about CSR in all aspects does not show it in communications, sometimes company difficulty (critically) dependent on maintaining customers trust, usually surrounded by rumors of child labor, unethical labor standards and the use of dangerous materials.

A Company offers quality at reasonable price. Thus a price is a key part of its value proposition, they doesn’t want to be seen excessive philanthropist (with Profits to share for Charities and not for consumers).

CSR is present in marketing activities; a company gives autonomy to individual retail to include cause-related marketing initiatives as a part of marketing mix. While these initiatives contribute to building company image as responsible, caring business, as short term proportions and sales drivers.

CSR and Marketing Approaches/ Strategies prospects

Above approaches demonstrate (explain), there is more than one way to create (build) successful connection between CSR and brand building activities.

The nature of business (Category, Customers, and Competitors) provides ways for company should promote its CSR-related activities. Similarly, company needs to be aware of risks and benefits that effects efforts. This requires that CSR


and Marketing cooperate to develop a sustainable effort that brings competitive advantages. CSR initiatives must be part of actual business practices, consistent communications and experienced by customers.

If the companies adopt this integrated approach and put CSR on marketing agenda, stakeholder’s expectations will be met and CSR activities will help achieve their desired result, build successful brand and businesses.


2- CSR and Marketing Approaches/Strategies according to Case studies

Four Social Philosophies and Corporate Social Responsibility~ Approaches and Issues for Companies:

Corporate social responsibility involves implementing activities that meet society’s expectations.

The question is what society expects from companies?

In this regard companies are subject to work on selection/collection of various demands from various stakeholders (A person, group or organization that has interest or concern in an organization).

In this regard to examine society’s essential expectations is to look at four social philosophies that have survived historical valuation and criticism.

Utilitarianism

Utilitarianism implies, companies to maximize the overall happiness of society, also companies satisfy the stakeholders.

But they raise issues;

- There is a risk that the interests of certain groups might be sacrificed; means it may lead to the greater happiness of one group at the expense of another. i.e. Cost cuts.

- Second issue, to determine whether society or specific stakeholders are happier than before, If the Government performs this role, it may intrude actively in the company’s operations on the pretext of public welfare(they violate public interests).If the company’s takes the role itself, it may apply Illogical principles and its decisions may go unchallenged.

Libertarianism

Libertarianism implies, companies to maximize shareholder profits within basic legal restrictions.

According to Milton Friedman, the role of corporate managers is to meet expectations of shareholders (an individual, group, or organization that owns one or more shares in a company), by whom they appoint to maximize profits through free and open competition without optioning to fraud or dishonesty.

But they raise issues;


-It prioritizes shareholder benefits, it may increase profits for shareholders, and it causes economic and social losses for other stakeholders. Because shareholders have different expectations, its level of satisfaction also differs.

-A company might try to increase its profits by taking advantage of legal loopholes.

New Liberalism

New Liberalism recognizes the right of companies to earn profits by utilizing their strengths, but it believes that this should be conditioned on, firstly their providing equal employment opportunities and Secondly, improving the lives of people living under poor circumstances.

New liberalism seeks Government intervention (Government role) and corporate compliance (agreement) with additional regulations. The government thus indirectly encourages companies to behave ethically and make social contributions.

But it is also criticized for the following reasons;

-There is no clear explanation of “people living under poor circumstances.

-A company may neglect government policies to protect its personal interests. Other stakeholders (workers, subcontractors) interests should be given superiority over those consumers in unfavorable and unfortunate conditions.

-New liberalism emphasizes the role of government. It means companies given importance to government judgments. This may result in companies disregarding the interests of their stakeholder.

Communitarianism

Communitarianism implies, companies to respect and assign to core community values (autonomy, order, social bonds, and virtues like trust. Communitarianism focus on the interests of the community.

It attempts to resolve the contradictory (conflicting) demands of freedom and rights.

But it arise some problems;

-Any grouping from the country of corporate registration and the region where factories and offices are located to entities in the supply chain, investor, shareholders, and industry group can be interpreted as constituting a “community”.


-How to determine the core community values. Whether the party in such agreement truly represents the community. It is possible that these values may actually block proper judgment and actions due to agreement.

-Company may achieve close bonds among employees, gain customer loyalty, and win the trust of local residents but some companies may take advantages of such achievements to act in ways that betray(disloyal) the community trust.

Summary

The four philosophies often have conflicting in expectations. Utilitarianism, for example, would demand that companies maximize happiness, while Libertarianism would seek free competition. New Liberalism would prioritize equality and rights, while Communitarianism would seek to balance autonomy and order. Corporate social responsibility involves fulfilling these expectations. The challenge how to resolve conflicting demands.

This requires companies to (i) become aware of both the demands made and the issues raised by each philosophy, (ii) to stand before the business challenges based on this awareness. These criteria focus on demands of four philosophies makes of companies and summarizing the issues raised by them.

Four Case Studies on Corporate Social Responsibility: Do Conflicts Affect A Company’s Corporate Social Responsibility Policy?

In contrast, Japanese companies prefer to fixate on areas where their contributions can be statistically quantified. Interest in gregarious aspects of CSR is significantly less pronounced than in other industrialized countries. In Japan there are no concrete provisions regulating CSR. However, the 1988 law that promotes categorical non-profit activities is of major paramount in this context. Early notions of CSR on an academic level can be traced back to the 1960s. In 1991 Carroll presented CSR as a multi-layered concept that consists of four interrelated aspects: economic, licit, ethical and philanthropic responsibilities. Carroll proposed a pyramid that analyses the dimension of CSR.

This article provides an overview of four case studies regarding different multinationals, namely Apple, Canon, Coca-Cola and Wal-Mart. These companies have been involved in CSR conflicts in different areas. This article will investigate whether the conflicts have affected the CSR policy of these multinationals and whether the companies subsequently set concrete targets. Coca-Cola, for example, has set a target to reduce its overall carbon footprint by 15% by 2020, compared to its 2007 baseline.


How the company resolved the conflict and whether the company implemented specific CSR policies with measurable targets as a response to the conflict.

Analysis

This article presented four case studies on the CSR policy of Apple, Canon, Coca-Cola and Wal-Mart. These multinationals have been involved in social and environmental conflicts. he article researched the conflicts, the measures the companies have taken to resolve these conflicts and their CSR policy in relation to those conflicts. The article aims to answer the question: ‘Do conflicts affect a Company’s CSR policy?’

In general, the authors found that the four analyzed multinationals had already implemented a basic CSR policy before experiencing the conflicts studied. Canon is the company with the longest history of implementing what we now refer to as CSR. Canon introduced the corporate philosophy of kyosei as part of its global corporate plan in 1988. Another early implementer of CSR policies is Wal-Mart. Since the early 1990s Wal-Mart had codes of conduct in place for their suppliers. Coca-Cola had taken early steps to report on the company’s activities and adopted the GRI guidelines in 2001. Apple has made its annual supplier responsibility progress report available on its website since 2007. Although most of the companies’ conflicts were of a different nature and with different degrees of severity, in the cases of Apple, Coca-Cola and Wal-Mart the issues resulted in a poor corporate reputation.

Coca-Cola’s conflict in India involved claims of water pollution and over-extraction of groundwater as well as allegations that Coca-Cola beverages produced in that country contained high levels of pesticide residues. The media attention that the conflict received was so widespread that the negative effect on the corporate image was not limited to India, but they also spread to the US. In addition, this conflict affected the company economically, with dropping sales and revenue losses.

The conflicts experienced by Wal-Mart that were studied in this research were of a labor nature. One of them consisted of a class action lawsuit by (former) female employees, the Dukes v. Wal-Mart Stores case, where the plaintiffs alleged gender-based discrimination. This lawsuit was not the first one to be experienced by Wal-Mart, which is one of the most often, sued companies in the US. But its relevance rests in the fact that the plaintiffs were suing on behalf of themselves and all women employed by Wal-Mart nationwide since December 1998, amounting to approximately 1.5 million women. After a long litigation process, the US Supreme Court concluded that the case could not be ruled in the plaintiffs’ favor because they did not have enough in common. The second analyzed conflict experienced by Wal-Mart consisted of media attention alleging that two of Wal-Mart’s sub-contractors in Bangladesh were using child labor. Apple’s suppliers were also


caught using underage labor. In addition, Apple is often linked to the suicides at Foxconn. The employees work up to 70 hours a week, ten hours above the maximum set by Apple’s Supplier Code. Also, in February 2011 he Guardian reported on another labor issue that Apple faced: the poisoning of Wintek workers by n-hexane.

Finally, Canon had non-severe problems that related to stress-related illnesses among employees in the company’s subsidiary in Denmark, as well as to findings that Japanese employees were forbidden to sit down during working hours. Neither these conflicts nor any other conflict that Canon has had ever resulted in much media attention.

The responses of the multinationals to the conflicts varied, ranging from attempting to repair reputation damage and denying the claims, to providing a remedy. Coca-Cola’s initial approach consisted of denying that the accusations were true. The company was very open about this and used the media, its website and its reports to make statements about its position in the conflict. For instance, Coca-Cola replied to news articles and made public statements, and it also included in both its sustainability report for India and on its website an update about the conflict in India. These efforts, however, mainly had the purpose of re-establishing the integrity of the company by providing evidence to prove that the accusations were untrue. But as was illustrated in the case study, making public statements and reporting on the conflict were not sufficient for the company to repair the reputation damage and to regain the trust of Indian customers. In response, the company took a more proactive approach that aimed at repairing and preventing damage to Indian water resources. Wal-Mart faced a lawsuit, which it strongly contested and it denied the claims. The case against Wal-Mart did not succeed, but currently the claimants have taken out another lawsuit based on individual cases per state which shows an eminent threat. When Wal-Mart was caught using child labor it responded by reporting in its 2005 Report on Ethical Sourcing the existence of child labor in the factories of its sub-contractors. While confirming the accusations in the media, this report also turns this unfavorable situation into a positive one by claiming that the increase in underage violations were due to the implementation of more stringent anti-child labor measures. The Labor issues with the suppliers had an impact on Apple’s reputation. About 18 month’s after the media reported on the suicides, Apple joined the FLA, striving to set a new standard in the electronics industry and having a supply chain that can be seen as a model for the industry. Although Canon did not have to deal with any damage to its reputation, after the stress-related illness in Denmark had occurred, the company also took a proactive approach in preventing the emergence of future conflicts. In its European and global Canon policies, Canon therefore included measures to reduce stress in the workplace.

The case studies provide evidence that after the multinationals experienced a conflict, the companies made changes to their CSR policies. A common feature of Canon, Coca-Cola and Wal-Mart’s policy the case studies provide evidence that after


the multinationals experienced a conflict, the companies made changes to their CSR policies. A common feature of Canon, Coca-Cola and Wal-Mart’s policy changes is the establishment of specific goals that they aim to achieve at company level. Although Apple did not set concrete targets, it has pledged to change its supplier responsibility practice. Furthermore, the sustainability reports in which the four multinationals present their CSR policies are created as long-term commitments and not just to resolve the current conflict.

Perhaps Coca-Cola can be said to be the company that adopted one of the most ambitious CSR policies after experiencing the conflict in India. Coca-Cola appears to be strongly determined to address its operational impacts on the environment, particularly on water. Given the nature of the impacts, the company has the possibility of carrying out research and taking steps towards preventing and remedying damage, with results that can be measurable. Coca-Cola initiated such efforts by adopting initiatives that are tailored to remedy the water problems it caused in India and to improve its image towards its customers.

Such initiatives include research and partnerships with the Indian local government. Subsequently, Coca-Cola adopted water management as one of the core elements of its global CSR policy and the company has committed itself to meet quantifiable targets concerning water management efficiency. Coca-Cola does not admit that the conflict in India is the main motivation behind the adoption of the water policies.

However, given the severe damage to its reputation – and the consequent revenue losses experienced – it is very likely that the conflict in India influenced the corporate decision to implement a CSR policy on water management efficiency in its global operations.

Wal-Mart as an early implementer of CSR regulations strengthened its existing policies after the conflicts. It now has policies to appoint women to management positions and set up a board in charge of fighting gender discrimination. Wal-Mart has also increased the number of audits to control child labor employment.

Negative publicity eventually resulted in Apple setting a new standard for the electronics industry. After the FLA report on Foxconn, Apple stated that it fully supported the recommendations of the FLA and publicly committed itself to try to change it practices. he FLA, external stakeholders and consumers will look to see if Apple adheres to its pledge.

To conclude, the case studies of Apple, Coca-Cola and Wal-Mart illustrate that the multinationals have adopted changes in their CSR and reporting policies after the conflicts occurred. These companies are transparent about those conflicts by publicly addressing them either through the media or in their annual or sustainability reports. Although Canon has not mentioned any labor issues, internet


research showed that Canon was involved in labor issues as well. In order to uphold sustainability standards it is important for companies to be transparent. As was presented in the research by Zwart & Tulder, companies that have been ‘on thin ice’ usually turn into frontrunners as far as CSR is concerned. Apple, Coca-Cola and Wal-Mart have been under public Scrutiny, but nowadays they can be seen as companies which have become models for their industry.

Coca-Cola has taken a proactive approach and implemented initiatives to solve the water problems.

Wal-Mart strives to be the greenest corporation in the world. Apple is aiming to set a new standard in the industry. Time will only tell whether it will stick to its promise to change its supplier responsibility practice. Canon is different in this respect, as its CSR policy was not impacted by media pressure. At first instance it might appear as if it is not comparable to the other mentioned companies. However, this article shows that companies like Canon need to be closely monitored as well.

Why Every Company Needs a CSR Strategy and How to Build It

Organizing for CSR Strategy Development

Ideally, well-managed CSR creates social and environmental value, while supporting a Company’s business objectives and reducing operating costs, and enhancing relationships with Key stakeholders and customers. It is therefore imperative that corporations establish a CSR unit whose primary responsibility is coordinating and integrating initiatives in all three theatres in which a company is engaged in, even if responsibility for the various initiatives remains dispersed throughout the company. This CSR unit, however, needs to be headed by a person who has senior management rank and holds the position as his/her primary responsibility. It is not uncommon for CSR offices to be headed by managers who split their time between CSR and other corporate responsibilities, such as head of Human Resources or Operations. For example, the 2011 survey of CSR managers and executives revealed that in all three CSR domains, dedicated CSR executives spent an average of only about 35 percent of their time on managing and administering CSR programs, with some professionals devoting less than that percentage of their time to CSR responsibilities. The remainder of CSR professionals’ time was devoted primarily to Human Resource functions, or for managers leading supply-chain initiatives, their remaining hours were spent supervising and managing production lines and “sourcing “functions. This underscores the widespread lack of commitment to the strategic aspects of CSR.

In order to craft and implement a company-wide CSR vision, the senior manager, and his/her staff, needs to be committed to and focused on this priority. For companies that are engaged in a wide range of CSR initiatives in all three theatres, and which are managed by separate business units, this is undoubtedly challenging. While the CSR officer cannot conceivably be present at every CSR program everywhere in the company, his/her surrogate should be a knowledgeable presence at the program including having decision rights in its design and execution. Having the knowledge and overview of the range and depth of the


various initiatives, it should be the responsibility of the CSR office to elevate strategic CSR topics and priorities for discussion at the company’s highest levels, and to ensure CSR is incorporated into the appropriate operating committee discussions at the business unit level. Devising a cohesive direction governed by a vision that expresses the company’s overarching priorities is imperative for crafting a coordinated and effective CSR strategy.

Different Motivations and Measures & Developing a CSR Strategy


Must Milton Friedman Embrace Stakeholder Theory?

Milton Friedman famously stated that the only social responsibility of business is to increase its profits, a position now known as the shareholder model of business.Subsequently, the stakeholder model, associated with Edward Freeman, has been widely seen as a heuristically stronger theory of the responsibilities of the firm to the society in which it is situated. Friedman’s position, nevertheless, has retained currency among many business thinkers. In this article, we argue that Friedman’s economic writings assume an economy in which businesses operate under the protections of limited liability, which allows corporations to privatize their gains while externalizing their losses. By accepting limited liability, Friedman must also accept a view of business as embedded in social interdependency, which serves as the logical and moral foundation for corporate social responsibility (CSR). To achieve consistency with his economic principles, Friedman must either abandon limited liability or modify his doctrine on CSR and his related shareholder model of business.

In this article, we argue that Friedman cannot maintain his position against corporate social responsibility if he wants to sustain other key economic principles, on which his theories depend, most notably, the principle of limited liability. If Friedman accepts limited liability, which must be the case given his other views on the economy, he would have to move from the shareholder model to the stakeholder model. This is due to the fact that limited liability is a fundamental element of the free market system that allows corporations to “socialize” or externalize their losses while privatizing their profits. This “privilege” constitutes a kind of tax on other people without their direct consent, which violates the voluntary nature of the exchange. In this way, various constituencies are made the bearers of business risk and, in effect, forced into a stakeholder relationship with the business. Limited liability reveals the contradiction that exists between the exclusive claim on profits by a business and the potential costs associated with business risks borne by the business’s stakeholders. By accepting limited liability, Friedman affirms a view of the corporation as embedded in an interdependent relationship with its stakeholders. And yet, by accepting limited liability, Friedman demonstrates that his commitment to private property and voluntary exchange is not absolute. Moreover, as these two principles constitute the cornerstones of his rejection of corporate social responsibility, we see an internal contradiction. By accepting limited liability, Friedman must also accept a view of private property and voluntary exchange that are embedded in a contextof social interdependency, and it is this interdependency that serves as the logical and moral foundation for corporate social responsibility. To restore consistency to his economic principles, Friedman must refuse limited liability or modify his doctrine on corporate social responsibility. Although Friedman neither accepts nor rejects explicitly limited liability, nevertheless it is clear from his writings that limited liability is assumed. Insofar as the acceptance of limited liability implies the stakeholders are going to bear some of the costs, they should also reap some of the benefits. Therefore, by accepting limited liability, Friedman has no other choice than to move from a shareholder model toward a stakeholder model, and in so doing, integrate corporate social responsibility into the corporate ethos. This acceptance of corporate social responsibility has nothing to do with the generation of greater profit for shareholders, as Freeman argues, but because it follows from the logic of private property ownership and the requirements of fairness that accompany the acceptance of risk distribution inherent in a system involving limited liability.


assignment csr and marketing approaches

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