MEANING AND SCOPE OF SOCIAL RESPONSIBILITY

1. MEANING AND SCOPE OF SOCIAL RESPONSIBILITY Introduction 1. What are the responsibilities of business organizations? 2. How many of these responsibilities must managers fulfill?

2. MEANING AND SCOPE OF SOCIAL RESPONSIBILITY Approaches to social responsibility- Several views have been developed of the responsibilities of business e.g. • Milton Friedman, • Archie Caroll, and • Andrew Carnegie.

3. MEANING AND SCOPE OF SOCIAL RESPONSIBILITY • Friedman is of the view that the social responsibility of business is to increase profit within the requirements of the law. If a business person acts “responsibly” by cutting the price of the firm’s produce to prevent inflation, by making expenditures to reduce pollution, or by hiring the hard-core unemployed, that person is spending the shareholders’ money for a general interest.

4. MEANING AND SCOPE OF SOCIAL RESPONSIBILITY • Archie Carroll is of the view that managers of business organisation have four responsibilities: • economic, • legal, • ethical, and • discretionary.

5. MEANING AND SCOPE OF SOCIAL RESPONSIBILITY • Economic responsibilities are to produce goods and services of value to society so that the firm can repay its creditors and stockholders. • Legal responsibilities are defined by government in laws that are expected to be obeyed

6. MEANING AND SCOPE OF SOCIAL RESPONSIBILITY • Ethical responsibilities are to follow the generally held beliefs about how one should act in society. • Discretionary responsibilities are the purely voluntary obligations a corporation assumes, i.e. philanthropic contributions. The difference between ethical and discretionary responsibilities is that few people expect an organisations to fulfil ethical ones.

7. MEANING AND SCOPE OF SOCIAL RESPONSIBILITY • Andrew Carnegie, the founder of US Steel Corporation, views corporations’ social responsibilities on two main principles: The Charity Principle and The Stewardship Principle. • 1. The charity principle require the more fortunate members of society to assist its less fortunate members, including the unemployed, the handicapped, the sick and the elderly.

8. MEANING AND SCOPE OF SOCIAL RESPONSIBILITY • The stewardship principle required businesses and wealthy individuals to view themselves as the stewards, or caretakers, of their property. Carnegie holds the idea that the rich hold their money “in trust” for the rest of society and can use it for any purpose that society deems legitimate.

9. DEFINITIONS OF CORPORATE SOCIAL RESPONSIBILITY ( CSR) • Forstater et al. (2002) define CSR as: “ a company’s actions that contributes to sustainable development through the company’s core business activities, social investment and public policy debate.”

10. DEFINITION OF CSR (CON’T) • McWilliams and Siegel (2001) define CSR as: “actions that appear to further some social good beyond the interest of the firm and which are required by law.”

11. DEFINITION OF CSR (CON’T) • Corporate social responsibility may be defined in this course as: “ A business strategy which involves a business identifying its stakeholder groups, and going beyond its legal obligations to incorporate their needs and values into the day-to-day decisions and activities of the organisation”.

12. KEY CONCEPTS Some key words appear in these definitions: • Stakeholder • Concerns/ needs • Voluntary

13. THE PRICNCIPLES OF CSR • Effects of organisations’ activities on society As a result of these effects, three principles form the justification for CSR engagements by firms: 1. Sustainability 2. Accountability 3. Transparency

14. PRINCIPLES OF CSR Sustainability • Sustainability implies that society must at all times use no more of its resources than can be generated. It is concerned with how the actions of the present have recurring effects upon the opportunities of the future.

15. PRINCIPLES OF CSR (CON’T) Accountability • Here an organisation must recognise that its actions generally affect the external environment and therefore assume responsibility for the effects of its actions.

16. PRINCIPLES OF CSR • Transparency • Transparency, in principle, means that all acts are obvious or communicated to all concerned. As a principle of CSR, transparency indicates that organisations make clear all reports of their actions and that those reports, whether in facts or figures, give accurate and detailed information of the relevant information.

17. CRITICISMS /ARGUMENTS AGAINST CSR • Friedman (1962) argues that the only social responsibility of business is to make profit within the law. Some arguments against CSR are based on the following issues: • “The business of business is business.” • Useless PR exercise • The idea of theft • Lack of Regulation of CSR

18. CRITICISMS/ARGUMENTS AGAINST CSR • Imposes unequal cost to organisations

19. CRITICISMS/ARGUMENTS FOR CSR Arguments in favour of firm CSR engagements are based on: • Interdependence of firm and society • Stakeholder interest may transcend financial benefits • Benefits of CSR- • (1)Helps attract qualified staff (2) Minimizes government intervention

20. ARGUMENTS FOR CSR • Improves Corporate Image – Goodwill • Leads to improved financial performance

21. PROMINENCE OF CSR • Key drivers of CSR engagements in recent years have been identified as: • Sustainable development • Globalization • Governance ( UN, OECD, Signing of Compacts) • Corporate sector impact • Communications (Technological Advancement) • Ethical consumerism

22. PROMINENCE OF CSR (CON’T) • Finance (pressure from investors) • Strategic Business Tool • Social awareness and education • Crises management

23. FORMS OF CSR ISSUES • Areas of Social Responsibility Concerns: • Concern for Consumers • Are products safe and well designed? • Are products priced fairly? • Are advertisements clear and not deceptive? • Are credit terms clear? • Is adequate product information available? • Are customers treated fairly by salespeople?

24. FORMS OF CSR (CON’T) • Concern for Employees • Are employees paid fair wages? • Are employees provided safe work environment? • Are workers hired, promoted, and treated fairly without regard to sex, race, colour, or creed? • Are employees given special training and educational opportunities? • Are handicapped people given employment opportunities? • Does the business help rehabilitate employees with physical, mental, or emotional problems?

25. FORMS OF CSR • Concern for Environment • Is the environment adequately protected from unclean air and water, excessive noise, and other types of pollution? • Are products and packages biodegradable or recyclable? • Are any by-products that pose a safety hazard to society (such as nuclear waste or commercial solvents) carefully handled and properly treated or disposed of?

26. FORMS OF CSR • Concern for Society in General • Does the firm supports minority and community enterprises by purchasing from them or subcontracting to them? • Are donations made to help develop and support education, art, health, and community development programmes? • Is the social impact of plant locations or relocations considered by managers who make those decisions?

27. CORPORATE SOCIAL INITIATIVES • What is corporate social initiatives? • Kotler and Lee (2005) who defined corporate social initiative as “ major activities undertaken by a corporation to support social causes and to fulfill commitments to corporate social responsibility.”

28. CORPORATE SOCIAL INITIATIVES (CON’T) • The second is from Hess et al. (2002, p. 110), who said, social initiative in the business context is defined here as any program, practice, or policy undertaken by a business firm to benefit society.

29. CORPORATE SOCIAL INITIATIVES (CON’T) • Options for Doing Good • Six major initiatives under which most social responsibility-related activities fall have been identified by Kotler and Lee (2005) as: • Cause promotions • Cause-related marketing • Corporate social marketing • Corporate philanthropy • Community volunteering and • Socially responsible business practices

30. CORPORATE SOCIAL INITIATIVES (CON’T) Cause promotions • A corporation provides funds, in-kind contributions, or other corporate resources to increase awareness and concernabout a social cause or to support fundraising, participation, or volunteer recruitment for a cause. The corporation may initiate and manage the promotion on its own; it may be a major partner in an effort; or it may be one of several sponsors.

31. CORPORATE SOCIAL INITIATIVES Cause-Related Marketing (CRM) • Cause related marketing has been defined as the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives. (Varandarajan& Menon1998, p. 60). • In adopting CRM, a corporation commits to making a contribution or donating a percentage of revenues to a specific cause based on product sales.

32. CORPORATE SOCIAL INITIATIVES (CON’T) Corporate Social Marketing • A corporation supports the development and/or implementation of a behavior change campaign intended to improve public health, safety, the environment, or community well being. The distinguishing feature is the behavior changefocus, which differentiates it from cause promotions that focus on supporting awareness, fundraising, and volunteer recruitment for a cause.

33. CORPORATE SOCIAL INITIATIVES (CON’T) Corporate Philanthropy • A corporation makes a direct contribution to a charity or cause, most often in the form of cash grants, donations, and/or in kind services. This initiative is perhaps the most traditional of all corporate social initiatives and for many decades was approached in a responsive, even ad hoc manner.

34. CORPORATE SOCIAL INITIATIVES Community Volunteering • A corporation supports and encourages employees, retail partners, and/or franchise members to volunteer their time to support local community organizations and causes.

35. CORPORATE SOCIAL INITIATIVES (CON’T) Socially Responsible Business Practices • A corporation adopts and conducts discretionary business practices and investments that support social causes to improve community well-being and protect the environment. Initiatives may be conceived of and implemented by the organization or they may be in partnership with others.

36. CAUSE PROMOTIONS • Differences Between Cause Promotions and other forms of corporate social initiatives • It differs from cause-related marketing in that contributions and support are not tied to company sales of specified products. • It differs from social marketing in that the focus is not on influencing individual behavior change. Although cause promotion campaigns have calls to action, they are most commonly in the areas of contributing, such as by donating money or time or by signing petitions.

37. CAUSE PROMOTIONS • It differs from philanthropy in that it involves more from the company than simply writing a check, as promotional campaigns will most often require involvement in the development and distribution of materials and participation in public relations activities, and will include visibility for the corporation's sponsorship. • Although a cause promotion may include employee volunteerism, it goes beyond this to participating as well in the development and implementation of promotional materials.

38. CAUSE PROMOTIONS (CON’T) • Typical causepromotions • Corporate cause promotions most commonly focus on the following communication objectives. Cause promotion programmes are of the following forms:   • Building awareness and concern about a cause by presenting motivating statistics and facts; by sharing real stories of people or organizations in need or who have been helped by the cause. • Persuading people to find out more about the cause by visiting a special web site or by requesting an informational brochure or tool kit.

39. CAUSE PROMOTIONS (CON’T) • Persuading people to donate their time to help those in need. • Persuading people to donate money that will benefit a cause. • Persuading people to donate nonmonetary resources, such as unwanted cell phones and used clothing. • Persuading people to participate in events, such as attending an art show featuring minority professional photographers, participating in a fundraising walk, or signing a petition to ban or promote a social an issue

40. CAUSE PROMOTIONS • By their very nature, cause promotion activities have a common theme of communications. They utilize publicity, printed materials, special events, web sites, and advertising, featuring the logo and key messages of the company as well as those representing the cause.

41. CAUSE PROMOTIONS Potential corporate benefits: • Strengthens Brand Positioning • Builds traffic and customer loyalty • Creates brand preference with target markets • Provides customers convenient ways to contribute and participate in social causes • Provides opportunities for employees to get involved in something they care about • Creates partnerships with society • Strengthens corporate Image

42. CAUSE PROMOTIONS • When should a corporate cause promotion be considered? • When a company has easy access to the target markets. • When the cause can be connected and sustained by a company's products. • When the opportunity exists to contribute underutilized in-kind services, such as in-house printing or corporate expertise. • When employee involvement will support the cause and employees get excited.

43. CAUSE PROMOTION • Developing a cause promotion campaign plan: • Identify campaign partners (if needed) • Design a campaign plan -Develop a creative brief • Components of creative brief: • 1. Target audiences • 2. Communication objectives: This is a statement of what we want our target audience to know (facts, information), believe (feel), and perhaps do(e.g., donate or volunteer for a cause), based on exposure to our communications

44. CAUSE PROMOTION • 3.What benefits to promise? • 4. Openings. This refers to the times, places and situations when the audience will be most attentive to and able to act on the message. • 5. Positioning and requirements. This section describes the overall desired tone for the campaign (e.g., serious versus light hearted), as well as requirements such as the use of corporate logos. • 6. Campaign goals e.g., desired reach and frequency goals, number of people to sign up for the race.

45. CAUSE-RELATED MARKETING • Meaning of Cause-Related Marketing (CRM) • Key features: • 1. Link with product sales or transaction • 2.Corporate contribution is conditional- dependent on sales or transaction • 3. Requires a formal agreement and coordiation with charity organisation • 4. Requires co-brandingadvertisements, and tracking consumer purchases and activities. • 5. involves more promotion, especially paid advertising

46. CAUSE-RELATED MARKETING • Typical corporate cause-related marketing initiatives include: 1. A specified cedi amount for each product sold 2. A percentage of the sales of a product or transaction is pledged to the charity. 3. A portion of the sale of an item, sometimes not visibly disclosed, will be donated to a charity. 4.The company matches consumer contributions related to product-related. 5.It may be for a specific time frame or open-ended 6. The corporation may decide to set a ceiling for their contribution from sales (e.g. Lysol contributing five cents for each product coupon redeemed, up to Gh 225,000). 7. The offer may be for a specific, designated product or for several or all products

47. CAUSE-RELATED MARKETING • When should a cause-related marketing (CRM) initiative be considered? • Those with products that enjoy a large market or mass market appeal. • Have well-established and wide distribution channels. • Product differentiation that offers consumers an opportunity to contribute to a favorite charity • When increased product sales, visibility, or co-branding with a popular cause would support corporate marketing objectives and goals for a product or products.

48. CAUSE-RELATED MARKETING • It may also be most successful in situations where a company has an existing, ideally long-term association with a cause or charity and then adds this initiative to the lineup, in an integrated fashion.

49. CAUSE-RELATED MARKETING • Steps in Cause-Related Planning Process • Situational Assessment: • 1.identifying the company's marketing needs • 2.identifying a social issue to support: What are the major social concerns of target markets? Of these, which one is most closely aligned with the company's core values and has the strongest potential for connections with products that would support marketing objectives. • 3. potential partners are explored. How large is their membership or donor base and what is their reputation in the community.

50. CAUSE-RELATED MARKETING • Setting Objectives • quantifiable goals, e.g. Increase in sales, desired fundraising levels. • Selecting Target Audiences • Identify their characteristics, • needs, and • media consumption habits • Determine the Marketing Mix (4Ps or 7Ps) • Developing Budget • Implementation and Evaluation Plans