Corporate Social Responsibility: It's All About Marketing
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C. B. Bhattacharya
Corporate responsibility policies have been gaining increasing attention from senior executives as questions of sustainability and green agendas have come to permeate business the world over.
The financial crisis has only heightened this trend by forcing companies to clearly identify themselves as responsible and trustable. Yet executives commonly don't understand the most effective ways to design and implement sustainability programs. Because of that they can't fully capitalize on the potential corporate responsibility has for creating business value, and they are achieving little with it despite all their interest.
So far businesses have mostly focused on direct routes to getting business value from corporate responsibility. They have pursued easy-win strategies or activities with direct commercial benefits, such as measuring and reducing their corporate carbon footprints. Such activities undoubtedly bring some value to businesses and society, but they fall far short of the mark.
What we are slowly starting to see is a second wave of corporate responsibility behavior marked by a clearer focus on the total business value such policies can bring. To fully benefit from corporate responsibility, businesses must wake up to the fact that they need to take a more indirect route to creating value with it. They must start by seeing where and how key stakeholders react to a firm's corporate responsibility initiatives.
In practical terms, this involves moving away from a top-down strategy determined by the board to a richer process of bottom-up co-creation with stakeholders. It means using focus groups and other marketing research techniques to understand the deeper psychological needs that corporate responsibility can answer for stakeholders, such as the self-esteem and pride that a consumer can draw from affiliating with a socially responsible company. With such knowledge companies can elicit and gauge the demands of their target audiences. They stand to learn a lot.
For example, recent research involving Procter & Gamble ( PG - news - people ), General Mills ( GIS - news - people ) and Timberland ( TBL - news - people ) revealed that many of their stakeholders had no idea of the companies' corporate responsibility initiatives, or had a very limited understanding and didn't find them personally relevant. Because of that, they often questioned the companies' motivations for engaging in corporate responsibility activities.
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