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 StakeholderCorporation

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?