01 Sep 2015

Corporate Social Responsibility in Corporations

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 Corporate-SocialCorporate Citizenship, Corporate Social Responsibility, Sustainability: three different names for what one could arguably call the central tension in contemporary society’s view of what corporations need to do to deserve a license to operate.

Unlike the corporations of the 19th and 20th centuries, which were set up to attract capital and to create manufacturing capability, present-day corporations do not need a manufacturing operation or a way to raise capital.  The 21st-century corporation, just as Drucker predicted, harnesses and focuses on human capital.  It is people with smart ideas, who know how to innovate and run things.

Corporate social responsibility (CSR) refers to a business practice that involves participating in initiatives that benefit society.  It has evolved from the actions of philanthropic foundations, other nonprofit organizations, and non-governmental organizations (NGOs).  These corporate citizenship initiatives reflect the beliefs and values of the enterprise, and those actions demonstrate them to the company’s business and local communities.

For example, Dawn, the dish washing liquid owned by multinational consumer goods company, Procter & Gamble (P&G) provides an exceptional case study of how the company successfully displayed its values and commitment to local communities during the 2010 BP oil spill disaster. After 40 years of partnering with the Marine Mammal Center and International Bird Rescue to save, rehabilitate, and release animals back into the wild, the company took the initiative to ship 2,000 bottles of Dawn dish soap to the Gulf region where the oil was expected to hit.  The detergent was used to clean ducks and other oil-covered marine life.  

detergentToday, the company benefits tremendously from these CSR-focused strategies and efforts.  The company reports having heard from consumers that they make a point of buying this product to help animals because they love animals.  Not only are they supporting these animals, but these purchasing behaviors and habits also help increase sales and ROI.  Even as much as the packaging labels of Dawn detergent bottles has made a difference.   At the supermarket, Dawn detergent sticks out from competitors on the shelves.  The product label messaging reads, ‘Dawn Helps Save Wildlife’, combined with cute images of otters, ducks and other birds largely affected in the spill.  

By establishing a strong strategic framework, it becomes possible to embed corporate social responsibility into the everyday business activities of the corporation and to align incentive structures to reflect this.  An organization’s strategic function should be communicating its mission and values to all audience members and covering a wide range of things,  primarily making sure the company is able to shape its messaging rather than have some other entity shape it.   A well-run CSR effort that delivers what it promises is a powerful example of good brand stewardship.  

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