MGT301

Corporate social responsibility

MGT301

Introduction

Corporate social responsibility (CSR) can be defined as the self-regulation mechanism established by the organization in order to comply with legal elements, ethical standards and international regulations in the business domain. CSR is a mechanism where in organization accepts its responsibility for every action taken by the organization so as to create a positive impact on various stakeholders of the organization such as consumers, suppliers, society, governmental agencies, environment and different members existing in public sphere included as the stakeholders of the organization. CSR word broadly covers the moral and ethical responsibilities of the organization towards the society in which organization prevails.

CSR has got severe criticism from the authors who recognize it as an activity which can distract the organization from its prime motto of profit making. Further present age marketers make best possible usage of the CSR action taken by the organization in order to develop organizational brand by creating positive impact on the consumers segment for the company (Marin & Ruiz, 2007). Present essay would analytically assess role of CSR initiatives adopted by the organization so as to develop organizational brand. Capability of business so as to leverage on their CSR initiative for building brand would be demonstrated through present essay.

Leveraging CSR for organizational brand building

Corporate social responsibility is also known as cause related marketing adopted by the organizations in order to attain organizational objectives. Cause related marketing is the long term partnership developed between the business organizations and non-profitable organizations so as to develop an image for the product or services marketed by the organization for gaining mutual benefits of both. Cause related marketing would be able to develop customer engagement by developing emotional as well as rationale interest so as to promote the organizational products & services. Present age of marketing has adopted the corporate social responsibility in order to change marketing tactics existing since long with the marketing practices which are highly efficient. As shown in the figure 1 below that ancient marketing age was related with either mass marketing or direct marketing where in organizations were only interacting with their consumers. While in present age of marketing with help of CSR initiatives organizations have created marketing channel which are related to all stakeholders of the organization (Menz, 2010). These stakeholders are related with each other so as to provide an overall positive impact for the organizational reputation by mutual interaction. Hence through CSR initiatives organization would be able to position their brand not only in potential consumer mind but also to other critical stakeholders such as government, financial community, community, employees and existing customers as well.

Figure 1: Showing the change in marketing tactics in present age marketing with CSR

In present age mass communication and direct marketing has been replaced with community branding technique with help of corporate social responsibility. It has been revealed through research that more than 86% of the consumers state that they are influenced highly by the organizations which are putting their efforts in order to make world a better place to live regardless of the fact that issues or cause for which these organizations are working (Murillo & Lorenzo, 2006). Hence analysing above findings it can be said that CSR helps the organization to develop positive reputation among the consumer mind regardless the cause or issues addressed by the organization. Further there is proven relationship between the CSR activities, brand equity, customer perception and buying behaviour of the customer. There is linear relationship between CSR and consumer perception & buying behaviour which build positive consumer perception regarding a particular brand with the help of CSR activities carried out by the organization.

There are four levels of involvement identified for the organization in order to develop brand value each level is associated with different CSR activity and have unique impact on the brand building (Bansal and Roth, 2000). First level of involvement is only limited to donate money which is related with lowest level of involvement with the consumer segment. For example Hong Leong Group in Singapore donated $10,000 for student pocket money funds which created a level of involvement with the consumers but this was just the initial level. Second level of involvement for CSR activity would be to conducting an event for cause promotion e.g. OSIM chair-ity drive was collecting funds for Children cancer foundation by making online auction of their massage chairs. Third level of involvement can be done through adopting a cause e.g. British Petroleum (BP) has adopted World vision organization wherein they promote their staff to participate actively in the activities of World Vision (Becker et al, 2006). BP and its staff promote activities such as sponsorship for kids, carrying out work for overseas communities and sending gifts for the poor people. Fourth level of involvement can be characterized by championing in a unique cause adopted by the organization as their CSR activity. For example, Ronald McDonald house charity which aims to provide shelter for the poor children in various countries has provided housing facility in more than 48 countries with financial resources of $400 million.

It is important that organization adopting CSR in order to promote their brand should stick to one cause and does not change it frequently as frequent changes in causes for CSR might confuse customers leading to negative reputation (Brammer et al, 2007). CSR initiative adopted by organization should be such that it properly resonates with the target audience identified by the organization as CSR initiative which does not resonate with audience would go unnoticed. CSR activities adopted by the organization should be like PR activities continuous efforts need to be made for the promotion of CSR activities so as to develop brand building exercise for the organization. An integrated CSR activity should be developed by the organization which is equally supported by different departments of the organization.

There are two vital factors in building organizational brand through CSR initiatives of an organization which are relevance and impact. It needs to be ensured by marketers that CSR activities undertaken by the organization has high degree of relevance with the core brand & business of the organization and with the core stakeholders as well. CSR activities need to create impact on people deriving benefits through activities, organization and target audience which is to be catered by the organization. Hence a mix of impact and relevance would determine overall effectiveness for the CSR initiative adopted by the organization in order to build their organizational brand (Bronn&Vrioni, 2001).

Adopting CSR for the brand building exercise in the organizational context would be done through three steps which are carrying audit for stakeholders, developing strategy for CSR and making action plan for CSR. In first step for CSR campaign development audit impact would be done with the stakeholders of the CSR activity (Carroll, 2000). In case audit resulted into expected high level of positive impacts on the stakeholders of the organization then CSR strategy would be developed along with making action plan in accordance with the strategy of the organization. Any gap between strategy formulation and action plan implementation can lead to significant problems in the overall CSR campaign for the organization hence action plan should be completely replicated through the strategy development exercise for the organization.

In order to promote organizational brand building exercise through CSR activities of an organization it is important to integrate various CSR initiatives with the brand of the organization. With deep research and analysis into CSR domain there are six methods developed for the integration of organizational brand and CSR initiatives of the organization which are categorized into two parts i.e. adaptable models and non-adaptable models with each model containing three methods for integration (Castaldo et al, 2009). Three non-adaptable models for CSR and brand integration of an organization includes mission driven, product driven and super regulated organizations.

Mission driven organizations are said to be the purest example of CSR-Brand integration and these organizations are also known as social enterprises. These organizations have been established with keeping social responsibility as the core value of the organization. Example of mission driven organization includes Green Mountain Coffee Roasters which started with the CSR as its core value (Chaudhuri& Holbrook, 2001). Second type of non-adaptable integration would be product based and Pepsico is an example of such organization where in CSR initiatives are confined to individual brands. Quaker Oats brand of the company had partnership with the world heart foundation as their CSR initiative. Some industries are highly regulated and being blocked for integration of brand & CSR activities such as pharmaceutical companies.

Three adaptable brand CSR integration methods are individual champions, communication teams and organic partnerships. Individual champion model of brand CSR integration would showcase an individual person responsible for managing CSR initiative in all forms. For example Symantec which is an organization maker of Norton antivirus where in CSR initiative was promoted by director of CSR Mr Cecily Joseph. Symantec developed Joseph cites which are under environmental stewardship. In communication teams model of brand CSR integration CSR is basically use in all communication programs of the organization (Cruz &Pedrozo, 2009). For example Henry Schein which is a drug distribution company managed CSR through three major departments which are corporate communication, professional relations and community relations. All three departments of the organization would be headed by the person handling communication department so that entire CSR initiative of the organization remain well coordinated and integrated for high effectiveness. In organic partnership method for the CSR-Brand integration CSR is one of the department for the organization but promotion of CSR is done through coordinated efforts made by all departments of the organization. This method of CSR-Brand integration can be known as most systematic form of integration and brand promotion. For example, CSR is one of the departments in HSBC but the first environmental campaign of the bank which is “Commit to change” is being coordinated and managed by the VP of retail marketing domain. Analysing such strategies reveals that organization wide coordination is developed for the integration which is the most effective approach for CSR-Brand integration.

Some of the popular examples of CSR-Brand integration among the corporates around the world include Ranbaxy, Tata group and Bharti group. At Ranbaxy CSR and environmental issues has been inculcated as the organizational DNA where in organization promotes the brand along with its CSR initiatives to give it best possible integration.Bharti which is one of the telecom giant has incorporate their organizational objective as to scale up the educational programs in under privileged countries where in poor does not have educate resources for completing their education (Bronn&Vrioni, 2001). Tata group is one of the most promising examples of inculcating CSR in the organizational culture so that employees and customers of the organization are well aware of the initiatives taken by the organization.

Conclusion

From the present essay which looks into the aspect of leveraging CSR in order to develop brand building for the organization it has been concluded that effective usage of CSR activities of an organization can help to develop a strongly reputed brand among the consumer segment. CSR has allowed organizations to adopt community based marketing which was earlier used to be direct marketing or mass marketing. CSR is known to have positive impact with the brand perception. There are four levels of involvement made by organization through CSR which are donating money, promoting event, promoting cause and championing a unique cause each related with higher brand reputation. Relevance and impact of CSR initiative are important in deciding application of CSR for brand building. There can be mainly six methods for brand CSR integration which can be adopted in order to enhance the integration and brand building. 

References

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