Chapter 13 Corporate Social Responsibility: A New Driver for Public Relations Conceptualizing CSR Value of CSR Expectation Gaps Legitimacy Procurement Model Companies that promote their CSR • • • • • • • Starbucks Home Depot HP Unilever Toyota BP Chiquita Concern for “triple bottom line” • Financial performance. • Social performance. • Environmental performance. Conceptualizing Corporate Social Responsibility (CSR) • Howard Bowen, father of CSR. • Need to operate in way consistent with societal values and objectives. • Beyond financial and legal to ethical and philanthropic. • Consider stakeholders beyond investors. Parameters of CSR • How operations impact society. • Should be net contributors. • Expectation of what counts as CSR can vary from culture to culture. Sample Social Impacts • • • • • • • Poverty Environmental damage Sustainability Human rights Treatment of workers Disease control/eradication Treatment of indigenous peoples Working Definition • The management of actions designed to affect an organization’s impacts on society. CSR as Voluntary • CSR goes beyond legal requirements. • Compliance is not being irresponsible, minimal CSR at best. Example: CSR types for Climate Change • Defensive organizations fight against the change and do not comply. • Opportunistic/hesitant organizations accept the change but do not discuss it publicly. • Offensive organizations lead the field by being first to take action and may urge governments to set tougher standards. Value of CSR to Corporations • Financial returns • Reputation returns • Avoid churn Financial Return • Result of timing. • No benefits if “forced” into CSR. • Greatest benefits when CSR is part of organizational strategy. • Way to differential organization from competitors. Beware of the Polls • Over 80% of people say they buy based on social responsibility. • In reality, usually under 20%. • Still can be a valuable customer base. Cause Marketing • NGO or PVO receives money from purchase of a product. • Idea of shopping to change the world. Reputation Returns • CSR can contribute to a positive reputation. • Positive reputations attract customers, investors, and quality employees. • CSR is a means of creating identification with constituents. • CSR reveals shared values. Avoiding Constituent Churn • Constituents best for organizations when neutral or supportive. • Constituent churn is when they mobilize against an organization. • Churn increases the cost of operating. • Churn can force behavior change — no financial gain from that. Role of Constituent Expectations • Constituents hold expectations for organizational performance. • Organizations can try to shape expectations. • Constituent expectations are constraints for organizations. Expectation Gaps • Expectation gap occurs when performance does not match expectations. • Sethi (1979) calls these legitimacy gaps. Types of Expectation Gaps • Perception Gaps: constituents unaware of policies and behaviors that meet expectations. • Reality Gaps: organizational policies and behaviors do not match constituent expectations. Negative Consequence • Constituent churn. – example: PepsiCo in Burma/Myanmar • Organization can face protests and boycotts. Positive Potential • Anticipate and prevent gaps. – example: Chiquita and Rainforest Alliance with Better Banana Project. • Organization becomes leader on the social concern. • Social concern becomes differentiating factors from competitors. How to Anticipate Expectation Gaps • Scan by listening to constituents about their social concerns. • Evaluate likelihood and impact of social concerns. • Anticipate, from research, which social concern might emerge as important. • Apply issues management to social concerns. Strategic Use of Social Concerns • Social concerns are value based. • Organization’s values must reflect the values of the social concern. • Constituents with those values are then drawn to the organization. Mechanism for Preventing Gaps Step One: values advocacy. • Publicly promotes a social concern/value. • Reinforces importance of the social concern/value. Mechanism for Preventing Gaps Step Two: embody the social concern/value. • Organizational actions and policies reflect the social concern/value. • Constituents “see” the social concerns/values in the organization allowing identification. • If effective, operating environment is more supportive. Step One: Emerging value is identified and selected Society Value Cluster Corporate Value Cluster Step 2: Same value is developed in the corporation Society Value Cluster Corporate Value Cluster Step 3: Selected value is promoted, including corporation’s use of the value Society Value Cluster Corporate Value Cluster Public promotion of selected value Step 4: Stakeholders perceive their connection to the corporation through overlapping values Stakeholder Corporation Cons of Linking CSR to PR • CSR is tainted when linked to PR and reputation building. • PR’s “ethical problems” make for a bad fit with CSR. Pros of Linking CSR to PR • PR helps management listen to constituents. • PR helps to create awareness of CSR. • PR can build legitimacy for CSR. Legitimacy Procurement Model • Value in third-party endorsements such as certification like Fair Trade. • Third-party endorsements build legitimacy for CSR efforts. • PR can help to promote those endorsements. Types of Publics • Apathetic, inattentive on most issues. • Hot-issue, active on issues that involve almost everyone/are widely discussed in the mainstream media. • Single-issue, are active on one or a small set of issues. • All-issue, are active on all issues (Grunig, 1989; 2005). Relevance to CSR Promotion • Targets for CSR include: ⁻ trendy: the hot-issue publics when social concern is widely known ⁻ committed: the single-issue and all-issue publics when the social concern is the single issue Trendy Publics • Limited interest in and knowledge of the social concern. • Want their actions to reflect social concern. • Allows them to feel better about their actions. • Fairly easy to win their support. Committed Publics • Social concerns are important values for them. • Want organizations that have same level of commitment. • Difficult to win their support. • More realistic goal is to prevent their opposition to the organization (churn). • Refer to the Legitimacy Procurement Model for a more detailed discussion. Reflection Points • Why does the organization’s commitment to CSR matter? • How can constituents tell if an organization is committed to CSR? • How can PR influence constituent perceptions of CSR? Reflection Points • Why are greenwashing and bluewashing relevant to discussions of CSR? • What is the role of Committed Publics in keeping CSR “honest?” • Can a company respected for CSR retain that respect when it is purchased by corporation not known for CSR? Reflection Points • How have companies such as Patagonia and the Body Shop built such strong reputations for CSR? • Do the motives for CSR really matter? • Who is benefiting from corporate CSR efforts?