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‡ Pure profit making ± economic responsibility. Businesses obey
the law but have lower ethical standards (Smith) ± invisible hand
‡ Constrained profit making - Wealth for shareholders, obey the
law and act ethically (Friedman)
‡ Socially aware ± show sensitivity to stakeholders, be aware of
possible harm
‡ Community service ± use vast resources for social good ± (social
enterprise)
‡ One vs two way relationships in communication context

Firm is pure Firm as an

profit making Win-win instrument of
± ANTI CSR social policy ±
PRO CSR
 È  
   
‡ Operating models - Input-output vs. stakeholder models
± Financial gain, instrumental, one way into firm
± Financial and social, instrumental and normative, two-way relationships
‡ Novak (1996) key economic responsibilities:
± Satisfy customers: value
± Generate returns for investors
± Create wealth; and create and maintain jobs
± Generate upward mobility - sense of aspiration for future
± Promote innovation
± Avoid monopolistic situations which disadvantage customers
± Extra-legal social responsibilities:
‡ Communicate with stakeholders
‡ Establish community among employees
‡ Protect moral ecology i.e. advertise ethically
 K |
‡ Calculated philanthropy? ± Philip Morris
‡ Behaving in a way that meets the expectations for a
company in your industry and markets to better the
interests of stakeholders broadly - Edelman
‡ CSR is about how companies manage their business
processes to produce an overall positive impact on
society ± Mallen Baker BITC
‡ Management activity concerned with actively working
to develop positive and sustainable business practices,
minimising the impact of an organisation upon its
environment ± Labour Government
‡ The Economist ± good management
‡ Usually 3 focal points ± environment, community and
employees
 | 
 
‡ Sustainability
‡ Community relations
‡ Issues management
‡ Cause-related marketing
‡ Employee engagament
‡ Employee volunteering
‡ Donations / sponsorship
 K |    
‡ Greater Access to Information
± more educated and informed publics
± awareness of regulation
± media globalisation ± ³the CNN world´
± decline of public trust in big institutions
‡ Activism: anti-globalisation, anti-corporate ± No Logo generation
± Consumer pressure as a force for change
± 51% talked about company behaviour to peers (Mori 2002)
± 32% advised someone not to use a company for ³irresponsible behaviour´
± ¼ of people worldwide had ³punished´ a company for µunethical¶ behaviour
Mori (1999)
‡ Legitimacy gap between corporate behaviour and social expectations
± Boardroom corruption, environmental impacts,
± Unethical practices
‡ Prevention of reputation damage
± Rebuild trust, license to operate?
± Obvious role for corporate communications
 |
  
 
‡ Growth of information society corresponded with decline in
trust?
‡ ³Democratisation´ of trust
± Edelman Trust Barometer - 10th year
± Highly trusted groups today: NGOs, Internet blogs, ³a person like
myself´ - peer opinions ³Kevin´, local and PSB media, traditional
community figures, TV vs. other media forms, employees
± Credibility of peers rose from 22% in 2003 to 56% in 2005 ± US
and 33% in 2003 to 53% in 2005 - Europe
± Poorly trusted: government, international, commercial media, [US]
companies (culture and values), institutions and authority
± Declining trust in corporations ± linked to reputation
 
 !
‡ 2009 report - Jan 2010
‡ Reached rock bottom levels - effects of economic crisis
± 4.5K global ABC consumers
‡ 62% trust business less than year ago, governments are worse
‡ Lower than after Enron and dot com crash
‡ US worst decline - 38% ³trust business to do what¶s right´ (down 20%,
~Europe - 36%)
‡ 66% think business has responsibility to resolve global issues with
governments
‡ aged 25-34 trust business more than older consumers
± Trust divide - Europe/US vs Asia
‡ China/Indonesia/Brazil - average 69% trust business
± NGOs are most trusted institutions
± Outside experts - doctors, academics - important allies to help
restore trust in business
‡ US - 17% trust CEOs
± Media trust declined - TV coverage 36%, newspapers 34%
 Restoring Trust
‡ Foundations to build trust
± Consistency - transparency
± Dialogue - mutual understanding
± Time
‡ Public engagement strategy
± 4 pillars: private sector diplomacy, mutual SR, shared
sacrifice, frequent communications
‡ Contributor not controller
‡ Say and do as you say«.
 ›
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Mandatory Optional ± affirmative Optional ± need for

duties targeted approach

Meeting social Outside scope of firm¶s Enlightened self-

obligations obligations interest

Beneficial for firm and Beneficial for society Beneficial for firm and
society. damaging for firm. society.
Nothing remarkable Rare Minimise govt
intervention
Minimum level of Unethical use of Win win
CSR resources
 K! |
‡ Martin (2002) Virtue Matrix
‡ Evaluate CR opportunities
‡ Globalisation heightens CR anxieties ± shifting frontiers

FRONTIER - INTRINSIC

  i.e. GSK 


e.g.
Prudential P&G anti bribery

| 
  |  i.e. workplace
crèche

CIVIC - INSTRUMENTAL
  
!
! |
‡ Ethical vs altruistic vs strategic?
‡ Lantos (2002) only if PR driven - altruistic CSR only ethical for private firms
‡ Porter and Kramer (2002) ± strategic CSR can bring competitive advantage
± Channel activities to improve ÷
÷  
± Argue Friedman et al only right if philanthropy is ³non-strategic´
± Flawed by 2 implied assumptions that:
‡ Social and business objectives are always separate and distinct
‡ Firms can contribute no greater benefit than individual donors
± P&K say improve competitive context improves long term profits plus
diffuses critics in non-market groups.
± 4 elements of competitive context:
‡ factor conditions e.g. Dreamworks
‡ demand conditions e.g. Apple
‡ context for strategy and rivalry e.g. Portman Group
‡ clustering for related and supporting industries e.g. UK car manufacturers
± Cisco (factor improvement) vs Avon (cause related marketing)
± Acid test for CSR ± would you still do it anyway if no-one knew about it?
 " |  
Business
&  S/h attitudes and Outcomes
behaviours
CSR Prog CSR Drivers ) 
î
 ‡Preference
Customers

 ( Reputation ‡Retention

!
 ! Employees

 ‡Productivity
Govt
| 
î  ± org NGOs
Employee ‡Emp retention
identity,
behaviour Community
objectives etc ‡Red wastage
and
motivations Suppliers  "
Objectives,
Investors ‡Legitimacy
stakeholder
priorities, ‡Disaster
corporate ‡Rev Volatility
competencies

Social Outcomes
Source: Knox and Maklan (2004)
 |
   |
‡ Highly complex and fraught with issues
± Main benefits are poorly evidenced as attitudes not behaviours
‡ L¶Etang 2 main types ± crisis and community
± Moral frameworks uncritically applied
‡ Utilitarian (self interest) vs deontological (duty)
‡ Distinguish truly ³moral´ CSR
± CSR just a tactic of PR for relationship development and image
management
‡ Poorly communicated ± non-standardised reporting
‡ Lack of business integration to see benefits
± Outcomes vs actions
 È) ! |K
"
‡ Greater total shareholder returns
± CR Index participants outperformed FTSE 350 between 2002-07
by up to 8% in TSR ± (5 and 10% sig)
‡ Lower stock market volatility
± Over 6 years, higher CR scores meant company better managed
social and environmental issues (5% sig)
‡ Dow Jones Sustainability Index 2008
± +ve correlations plus significant impact on ³cost of external
financing, return on capital, sales growth and fade rate of
competitive advantage´
‡ Increased importance in boardrooms
± 2002 ± 13% CR on board vs 60% in 2007
‡ Source: Mori/BITC report 2008
 |

   |
‡ CSR: Measuring the triple bottom line
± How?
± Schneitz & Epstein (2005) study ± CSR had ³insulating
effect´, creating a ³reservoir of goodwill´
‡ Communication of CSR activities (Dawkins, 2004)
± Communication is missing link ± balance
± Tailored communication approaches
‡ Attract employees, investment evaluations, consumer marketing
± Consider source and intensity
‡ Employee communication ± ambassadorial approaches
‡ 88% expect to see CSR reporting
 ±|



) 
‡ $  
 |
‡ BITC: how you do business is what counts
± Building mutual trust
± Focus on values and culture
± Sustainability ± including business practices!
± Governance and regulation

³Customers want to do business with those they trust; employees

want to work for businesses whose values they share; local
authorities want people as neighbours who do well so I think as we
go through these very tough times one has to watch what business
is doing and how it¶s responding.´
Š

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