Final Thoughts

Thanks to everyone who has commented on my blog. I found your comments really interesting. It seems that the majority of people who commented believe CSR is motivated by purely self interest. The comments ranged from an argument that CSR is a good pr tactic to the belief that corporations practise CSR to increase their competitive advantage. I also found the example about the tobacco industry particularly interesting. Audrey posed a great question when she asked, how can the tobacco industry say they are socially responsible when it is well known their product kills people and thus hurts society?

On the other side of the argument I did receive a few comments arguing that some corporations do in fact practise CSR for reasons other than those that are just selfish. These thoughts ranged from the notion that companies do want to give back to the communities that have invested in them, to the suggestion that, in the end, a corporation is made of people like you and me, who do care about society, not just money obsessed people who only care about themselves.

I personally believe that CSR motives vary from corporation to corporation. I personally, after researching this topic, do not believe all corporations participate in CSR only for self interest. I do think though, that a CSR programme that benefits both the company and the community is the ideal CSR programme. I do not see the harm in a company benefiting financially from their CSR programme because, in the end, society needs corporations to be successful. They provide society jobs, services, and tax dollars. If a corporation was to fail it would be the ultimate form of social irresponsibility. If however, a corporations motivations are only for self interest, I believe, their stakeholders will catch on and the corporation will suffer accordingly.

CSR and Sport Events

This post is shifting away from CSR transparency and is focusing on how CSR is used for a mega-event.

As I was doing research for my dissertation I found a very helpful article in Sport Marketing Quarterly entitled "More Than Just a Game? Corporate Social Responsibility and Super Bowl XL". It explored the CSR activities executed by the National Football League (NFL) at its 2006 Super Bowl in Detroit, Michigan.

According to the article, the Super Bowl attracts more viewers and creates more revenue than any other single sport event. It is more than just a game however, it is a mega-event which heavily impacts its host city. Therefore, the NFL has taken serious actions towards investing in community outreach programmes in the host Super Bowl city.

These actions include, working with local organisations to develop programmes focusing on issues such as community rebuilding, the environment, youth outreach, and minorities. The article breaks down the Super Bowl CSR programmes based on Carroll's framework of corporate social responsibility, specifically the ethical and discretionary responsibilities, Carroll argues, corporations have towards society.

Carroll describes ethical responsibilities as behaviors and norms society expects businesses to follow which extend beyond what is required by law. Discretionary CSR are philanthropic activities businesses take part in that societies both expect and desire, but these expectations and desires are not as clear-cut as they are for ethical responsibilities. Therefore, executives must use their own judgements as to what discretionary responsibilities they should implement.

Two examples of ethical CSR initiatives executed at Super Bowl XL are:

• Emerging Business Program


• Super Makeover

The Emerging Business Program was launched in 1994 and provided local women and minority owned businesses the chance to participate in the Super Bowl business process through using their products and services. In Detroit, 750 firms were on its resource guide and approximately 250 firms received contracts worth an estimated $5.8 million.

The Super Makeover programme was an initiative to clean up Detroit. Actions included picking up trash, painting over graffiti, and removing weeds in pedestrian areas.

Many CSR programmes were also carried out which falls under Carroll's discretionary CSR responsibilities. Two examples of these are:

• Super Reading Program
• SuperBuild

The Super Reading Program encouraged children to read and use their local public libraries. It included a book drive which, partnered with numerous corporations, collected over 14,000 books and purchased 3,000 new books for the Detroit Public School system.

The SuperBuild programme partnered with Habitat for Humanity and built 40 homes which were shipped to Forth Worth, Houston, and College Station, Texas for families displaced by Hurricane Katrina.

The big question is, what were the motivations for both these and other CSR programmes for this mega-event?

The article mentions a few reasons. For one, it was to prevent the NFL from being perceived in a poor light. Critics of mega-events argue that they have a negative social and environmental impact on host communities. They stress that money that goes towards the event could be used instead for improving education, health care, and/or the environment. By giving back to the local community through initiatives addresses such issues, the NFL is seen as working to improve such conditions and criticism is significantly lowered.

Another reason is, again, image motivated. By targeting women, minority and children through CSR initiatives, they are shaping the NFL's image as an organisation that cares about minorities, women and children and not just the bottom line.

Do these ulterior motives matter though? Yes, the NFL is concerned with pragmatics, but their CSR programmes have been judged to, in the long term, make significant improvements in many of the communities they are carried out in.

I personally believe that this is a good example of how CSR can benefit both the community and the organisation. The NFL, I believe, provides more than just sport entertainment. It motivates children to play sports, stay active and be healthy through both providing them role models, and through their community relations programmes. In return, the league benefits from increased fan loyalty, positive image reputation and increased profits from corporate sponsorship.

Concluding thoughts about CSR transparency

After pondering the idea of CSR transparency I cannot say I have found concrete answers regarding what the motives are which drive corporations to be candid about their CSR actions. After considering all that I have read though, I have personally concluded that the following motivations factor into the decision to publish a CSR report:

1) Keeping up with the latest business trends. CSR reports are by no means mandatory yet an increasing number of corporations have decided to produce one. The buzz throughout the corporate world seems to be that in order to be successful you must be transparent.

2) Pleasing stakeholders. From my research I have deduced that corporations, on the whole, do not create these reports to attract media attention, as it can backfire (see my earlier example about Ford). Rather, they produce them for investors, employees, pressure groups and a variety of other key stakeholders. Those who have vital interests in a company increasingly demand to know more about how a business operates both ethically and responsibility.

3) Pride. I understand that some people may not agree with this, but I do believe a number of corporations are truly dedicated to being socially responsible. If a corporation has devoted their resources and money to a sustainable CSR programme, a CSR report allows them to detail their progress, goals, and issues. It is a way for them to publicly display the work they have done and plan to continue doing.

I am sure there are a number of other motivations involved, and I am curious to find out which motivation factors more heavily then the others. I am sure it varies from corporation to corporation.

What do you think?

CSR for publicity?

In my last blog I talked about an article I read in PR week about CSR and transparency. That same article also discussed whether or not corporations should use CSR for publicity purposes. The article argued that companies that are candid about their CSR efforts solely for publicity purposes do not understand the reasoning behind CSR programmes and reports.

The article observes that the media has, in general, ignored CSR transparency and that CSR reporting should be done for stakeholders, not the media. Those who do publicise their CSR reports may find the results more damaging then helpful. They use Ford's attempt to gain publicity as a prime example of what can go wrong.

In May 2000, Ford released their first ever 'corporate citizenship report' which stated that their popular sport utility vehicle (SUV) was both environmentally unfriendly and dangerous to small car drivers. The candinness of the report was called shocking by some, and Ford used the report to obtain positive media coverage, and gave Ford's chairman, William Ford, the chance to promote his image of a 'green' executive. The article described him as enjoying the attention and said he was eager to discuss the reports openeness with the media. The report even earned Ford some praise from environmentalists.

Ford followed up this report with their 2001 report which again was very open and honest about their struggles to be environmentally friendly, and the environmental goals they were striving to reach. In 2002 however, Ford was in a different situation from the previous two years. The company was facing large financial problems which was affecting their ability to contribute to becoming greener. In May, they announced that their CSR report would be delayed by two months and environmental groups began to call William Ford an environmental poseur. Criticism continued when Ford finally released the report and announced that due to their financial problems their environmental initiatives were to be put on hold, which immediately became a huge story in the media.

This case study illustrates that once a company makes a public statement the public will hold them accountable for it. The public will punish a company that says something only because it is what they believe the public wants to hear. In my opinion, this case study proves that motivation does matter. Ford was motivated by gaining positive publicity, not by a desire to address environmental issues. The media picked up on this and rather then improving their image, Ford, in fact, hurt it.

CSR Transparency

I read an interesting article today in PR Week, “Market Focus: CSR: beyond lip service”, about Chiquita Brands and their candidness regarding their CSR efforts. The article describes how Chiquita Brands revealed that workers in several of their South and Central American facilities had not received adequate safety training. The company also disclosed that several women had been sexually harassed at their facilities in Guatemala and that some workers in Panama were not enrolled in the social security system. All of these admissions were available to the general public in Chiquita’s second annual Corporate Social Responsibility Report.

The article indicates that America is still behind Europe when it comes to CSR activities, but more American companies, like Chiquita Brands, are becoming more transparent about their CSR efforts. In the past, companies did not disclose anything beyond the basic ‘we care’ message, but now companies are increasingly more forthcoming about their goals and strategies towards CSR. This is, in part, due to the understanding that, in order for stakeholders to take CSR reports seriously, the reports must be candid. Michael Mitchell, the spokesman for Chiquita, stressed that their CSR report was not a PR tactic but rather their attempt to be honest about their current achievements, what they want to achieve and where they have struggled.

I wanted to personally read Chiquita’s latest CSR report so I had a look at their website, http://www.chiquita.com/, and I quickly found a link to their 2005 Corporate Responsibility Annual Report. The report initially mentions their core values and code of conduct and stresses how seriously they abide by them. One specific paragraph that stood out to me was their justification for participating in CSR. The paragraph says:

We strive to achieve high standards of corporate responsibility because it is
the right thing to do. It enables us to enhance the trust in our brand,
strengthen our reputation and improve the company’s financial performance, which
is good for all investors.

Other parts of the report that stood out to me was it’s emphasis on the significant amount of investments the company puts into their CSR efforts, as well as how and why CSR benefits the health and growth of the company. It also provides detailed reasons for participating in their various CSR projects. I also found it interesting how they declare that they, along with their employees, are proud of their CSR activities.

After reading Chiquita’s CSR report I am lead to believe that they, in fact, do care about more than just the bottom line. The report demonstrates to me that Chiquita has taken a sustainable and dedicated approach to CSR.

Arguments for CSR

In my last post I summarised a survey analysing business executives attitudes regarding CSR. I realise however, I failed to, in my previous two posts, give a general introduction to CSR and why corporations incorporate it into their strategic planning. Therefore, this post will backtrack a bit and briefly describe and analyse CSR and three different arguments supporting the need for CSR. My apologises if these are common knowledge, but I feel it is necessary for this blog.

There are various academic definitions of CSR, but I believe my corporate communications professor Kate Watts sums them up quite well when she says, "CSR is about how companies manage their business processes to produce a more positive impact on society." From what I have researched on the topic, CSR seems to vary from corporation to corporation. Professor Watts once again provides a good explanation for this by arguing that this is because CSR is about voluntary initiatives codes of conduct and reporting, and because there is no formal framework or definition for businesses to follow.

So why do corporations participate in CSR and not follow Milton Friedman's argument that by corporations accepting a responsibility to society other than making as much money as possible for their stakeholders, they were undermining the very foundations of a free society? In their book Strategic Corporate Social Responsibility: Stakeholders in a Global Environment, Werther and Chandler challenge this viewpoint and provide three arguments for CSR.

1. A moral argument - They explain that although a company needs profits to survive they are only able to obtain these profits because of the society they work within. Society provides corporations with educated and healthy workers, a safe and stable physical and legal infrastructure, and a consumer market for their products. Without these societal contributions businesses would flop, and therefore a business has an obligation to society to function in a socially responsible manner based on the expectations and values defined by society.
2. A rational argument - While the moral argument is based on subjective values, the rational argument is based on avoiding societal sanctions. By voluntarily addressing socially responsible issues a corporation is saving the hassle of public scrutiny, excess costs and activist attention. CSR is a way to anticipate and act upon societal concerns before they present financial, reputation and operational burdens on an organisation.
3. An economic argument - To put it simply, CSR can add value to a corporation financially. It allows companies to reflect the concerns and needs of their stakeholders which can lead to increased social acceptance and financial benefits over the long term. There is a growing market of consumers and investors who base their investment or purchasing decisions on the reputation and social responsibility of a business. A company that is perceived as socially irresponsible could lose these important stakeholders.

These three arguments have helped solidify the argument for CSR, but arguments two and three are based on corporations acting only in self-interest. As CSR increasingly becoming necessary for corporations to invest in, will society begin to separate corporations who are motivated by self-interest from those who are truly dedicated to social responsibility? I believe, with society becoming ever more aware of public relations and spin, corporations who participate solely in CSR for economic interests, or to avoid being targeted by activists, risk a societal backlash if the corporation's true motivations become publicly known.