Sunday, March 11, 2012
Voicethread Application Assignment -- Financial Report Analysis
https://voicethread.com/share/2840923/
Corporate Social Responsibility and Competitive Advantage
Several of this week's readings dealt with the concept of Corporate Social Responsibility, and how it is becoming an increasingly popular practice in Corporate America.
Since the fall of Enron and various other business scandals, stakeholders want more from the companies they invest their money in; not only from a product standpoint, but also from an ethical one. They want to know their money is going into a company that cares about the environment it inhabits, and that the organization genuinely wants to make an impact in the community that goes beyond its bottom line.
Because of these relatively new expectations placed on the organizations that comprise the business world, we as communications professionals can develop these expectations into a competitive advantage for our organization. Such is the main point made by Porter and Kramer (2006) in their article, Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility.
The authors contend that CSR can be much more then just writing a check to a local charity or some other small charitable endeavor (p. 1). Rather, if we approach CSR from a strategic perspective, we can create significant opportunities and competitive advantages - both short and long-term - for our organization.
So how do we go about thinking strategically in terms of our philanthropic outreach? For starters, we can identify points of intersection between our organization and the society it inhabits (p. 1). How does your organization affect society? What positive impact does it have on its environment? Does it provide a unique product or service that makes the world a truly better place? Do the working conditions or incentive programs you offer make it a great place to work? All these aspects can help determine what type of outreach you will do, and how you go about relaying this message to the outside world. In each one of these, there is a possible competitive advantage. Portraying your company as the company that cares - even if its about its own employees - can create an advantage over your competition.
Second, you must select specific social issues you want to address (p. 1). You should attempt to find issues that will help both society and your bottom line at the same time. For instance, by helping fund and administer relief efforts in Haiti, you are not only helping the country and creating a better life for its people, but you are also helping your corporate brand. Lastly, you should attempt to find a small set of endeavors you wish to pursue, and make sure they have the ability to have a significant impact on both society and your organization (p.1). By minimizing your endeavors and making sure they are of major significance to all parties involved, you will have the potential to create an even bigger impact for both stakeholders and the environment, one that will create significant advantages going forward.
Corporate social responsibility is something that is becoming an increasingly important part of how an organization conducts its business, and it is an area that can no longer be appeased by simply writing a check. Just like any other aspect of your organization, a strategic approach can yield tremendous results in terms of competitive advantage. By taking the time to think about what endeavors you'd like your organization to pursue, minimizing the number and maximizing the reach, and develop an idea of how your organization impacts society, you can create significant competitive advantages that could mean the different between whether or not your company reaches its bottom line.
References
Porter, M. and Kramer, M. (2006). Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review, December, 2006 p. 1-15.
Since the fall of Enron and various other business scandals, stakeholders want more from the companies they invest their money in; not only from a product standpoint, but also from an ethical one. They want to know their money is going into a company that cares about the environment it inhabits, and that the organization genuinely wants to make an impact in the community that goes beyond its bottom line.
Because of these relatively new expectations placed on the organizations that comprise the business world, we as communications professionals can develop these expectations into a competitive advantage for our organization. Such is the main point made by Porter and Kramer (2006) in their article, Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility.
The authors contend that CSR can be much more then just writing a check to a local charity or some other small charitable endeavor (p. 1). Rather, if we approach CSR from a strategic perspective, we can create significant opportunities and competitive advantages - both short and long-term - for our organization.
So how do we go about thinking strategically in terms of our philanthropic outreach? For starters, we can identify points of intersection between our organization and the society it inhabits (p. 1). How does your organization affect society? What positive impact does it have on its environment? Does it provide a unique product or service that makes the world a truly better place? Do the working conditions or incentive programs you offer make it a great place to work? All these aspects can help determine what type of outreach you will do, and how you go about relaying this message to the outside world. In each one of these, there is a possible competitive advantage. Portraying your company as the company that cares - even if its about its own employees - can create an advantage over your competition.
Second, you must select specific social issues you want to address (p. 1). You should attempt to find issues that will help both society and your bottom line at the same time. For instance, by helping fund and administer relief efforts in Haiti, you are not only helping the country and creating a better life for its people, but you are also helping your corporate brand. Lastly, you should attempt to find a small set of endeavors you wish to pursue, and make sure they have the ability to have a significant impact on both society and your organization (p.1). By minimizing your endeavors and making sure they are of major significance to all parties involved, you will have the potential to create an even bigger impact for both stakeholders and the environment, one that will create significant advantages going forward.
Corporate social responsibility is something that is becoming an increasingly important part of how an organization conducts its business, and it is an area that can no longer be appeased by simply writing a check. Just like any other aspect of your organization, a strategic approach can yield tremendous results in terms of competitive advantage. By taking the time to think about what endeavors you'd like your organization to pursue, minimizing the number and maximizing the reach, and develop an idea of how your organization impacts society, you can create significant competitive advantages that could mean the different between whether or not your company reaches its bottom line.
References
Porter, M. and Kramer, M. (2006). Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review, December, 2006 p. 1-15.
From 'Starter' to Finish
I was fortunate enough to have had several guardian angels
in my life. One of these angels was my
high school basketball coach, David Beckerman, a man who gave me the
imagination and competitive edge to succeed at any endeavor on and off the
court.
David Beckerman was much more than a high school basketball
coach. In fact, being a coach was
probably the least stressful task on his daily schedule. Beckerman, or “Coach B”, was the Chairman and
CEO of Starter Corporation, a sports apparel firm that tragically filed for
bankruptcy in April, 1999 (Lubbock Online, Starter Corp files for bankruptcy,
1999).
I interviewed Coach B to gather his thoughts regarding the
Starter Corporation and our Week 7 topic, “Communicating through Financials.” Due to the sensitive nature of the topic and
Coach B’s busy schedule, this interview was brief; however Coach B makes some
comments that provide deeper meaning to out readings. (I took snippets from his
responses to highlight parts of our discussion that were meaningful to our
curriculum)
Me: Coach, could you please
describe the events and/or factors that preceded Starter’s bankruptcy in 1999?
Coach B: Well, Casey that is a loaded question. It was a perfect storm of events that took
place in our market and with our key clients.
The lockouts of the 1990’s did not help – the NBA and MLB were major
clients of ours and we depended on their business. There was also increased competition – we pioneered
a sports market that proved to be lucrative and companies like Nike and Adidas
soon wanted a piece of the pie. If I had
the chance to go back in time I would do some things differently, but some
events were unavoidable.
Me: Please describe
how the challenges Starter faced affected the financial health of the company.
Coach B: I started in
the 1970’s selling t-shirts out of the back of my trunk and Starter developed
into a business generating over $300 million a year. Strong sales numbers drove our business. When our sales numbers lagged our business
began to struggle. There are things you
can do to get your business going and we tightened the belt and reenergized our
marketing efforts.
My Commentary:
In my opinion, Coach B’s brilliance has always been his
engaging personality and marketing genius.
Coach B is a salesman at heart and it was no surprise that net sales was
a number that he mentioned in the interview.
I can imagine that Coach B was a charismatic executive who thrived in
the communication arena: whether it
included varying his language to strategically use ambiguity (Eisenberg, 1984)
or closing a deal with the commissioner of the NBA for a non-exclusive
licensing deal (NYT: Business Day, Market Place, March 1994). Starter Corporation went public in 1993
(Conntact.com Starter Corp. n.d.) and Coach B spoke briefly about the added
responsibility he had to investors.
Starter’s fall took place before the Enron scandal and I wonder what
added responsibilities Coach B would have post 2002 due to the ‘Enron effect’
(Allen, 2002).
Lubbock Online (1999).
Starter corp. files for bankruptcy.
Retrieved from http://lubbockonline.com/stories/042099/bus_LS0462.shtml.
Eisenberg, E. (1984) Ambiguity As Strategy In Organizational Communication, Communication
Monographs, 51, pp.227-242 (full
article)
New York Times (1994).
Business Day, Market Place.
Retrieved from http://www.nytimes.com/1994/03/01/business/market-place-after-starter-s-stumble-some- see-a-buy-but-others-are-cautious.html?src=pm.
Conntact.com. Starter
Corp. Retrieved from http://www.conntact.com/archive_index/archive_pages/2837_Business_New_Haven.html
Allen, C. (2002) Building Mountains in a Flat Landscape: Investor Relations in the
post-Enron Era, Corporate Communications:
An International Journal, Volume 7 (2), pp. 206-211 (full article)
Red Cross and FedEx: Doing well and good
In thinking about an example to use for this week’s assignment, I reflected on my experience as Director of Community Outreach at the American Red Cross. I clearly remember being on one of the first planes allowed to depart from San Jose airport to New York in order to respond to the September 11 attacks. This was my first large scale disaster and I did not know what to expect. It was a once in a lifetime experience, for many reasons, in which I realized how effectively the Red Cross works with corporate partners to leverage resources and expertise in order to respond to large scale disasters. Employees from American Express and other corporate partners were mobilized to staff feeding and sheltering centers along with other important sites were 9/11 family members gathered to wait for news.
Partnering with corporations was not only good for our disaster relief efforts, but it also allowed our corporate partners to give in different ways. Since corporate social responsibility (CSR) and investment relations were key topics during the readings this week, I found an article in the New York Times where the CEO of FedEx, Frederick W. Smith, was interviewed about the company’s giving and the reasons behind it. FedEx is a major Red Cross partner and during disaster relief operations each partner provides an expertise, in the case of the former they provide “logistics and financial support” (Belson, 2011, p. F.15) while the latter provides expertise in exactly what is needed on the ground. Mr. Smith made a clear statement at the beginning of his interview with Benson in which he explains that “it’s good business to be a good corporate citizen” (Benson, 2011, p. F.15). His statement aligns with the Franklin’s assertion that CSR can help a company create value (Franklin, 2008, p.2). This good citizenship is not only of value to the recipients but it also increases a company’s reputation (Franklin, 2008, p.2) which in turns helps companies develop some of the “trustworthiness” that Allen (2002) feels is important in investor relations (p.211).
After reading the full article, I deduced that FedEx would be a company that Franklin (2008) would highlight as having an effective CSR implementation. As highlighted in the article, FedEx’s CSR has evolved and it is strategically done by doing the following: 1) forging “relationships with organizations that are in the business of helping people...such the American Red Cross” (Benson, 2011, p. F.15); 2) setting a criteria for giving that focuses on their “business objectives or tends to further their goals as a corporation” (Benson, 2011, p. F.15); 3) creating a “budget every year for in-kind giving and flying in disaster relief” (Benson 2011, p. F.15); 4) and finally, embracing employee volunteering which as described in the article “is becoming an increasingly important part of corporate social responsibility” (Benson, 2011, p. F.15). I believe that Franklin would highlight FedEx as a model company since, based on the previous examples, its CSR “is not some separate activity that companies do on the side, a corner of corporate life reserved for virtue; it is good for business” (Franklin, 2008, p.3) and Mr. Smith would certainly agree (Benson, 2011, p. F.15).
In returning to investor relations, it seems like CSR not only helps “protect” a company’s reputation (Franklin, 2008, p.2), it also allows them to make strategic investments through corporate giving in places where they want to increase market share as done by FedEx (Benson, 2011, p. F.15). This in turn can yiled higher profits for the company, better brand recognition, and increase their level of goodwill and trustworthiness. In the era after Enron that Allen (2002) describes, and where Franklin (2008) and Benson (2011) point, investors are showing more concern with interests beyond the bottom line, CSR can become an effective unifying cause for companies and investors. Companies would do well in investing resources internally to better communicate to these stakeholders and use CSR to support their bridge building effort by making a company more attractive to other investors who might now take into account the amount companies spend on socially responsible causes. Customers certainly take this into account and this is why FedEx has been strategic in their giving (Benson, 2011, P. F.15).
Finally, in response to a question by Benson (2011) about how shareholders view corporate giving, Mr. Smith states that the “the evolution of thought about this has gone from the only purpose of a business is to create a return for shareholders to a broader responsibility to shareholders, communities, suppliers. That debate has not been resolved, but we know from our customer research and loyalty research that being a responsible corporate citizen, especially to younger cohorts, is enormously important” (Benson, 2011, p. F.15). This sense of responsibility positions a company to not only serve its investors, customers and communities, but to seriously look at ways in CSR can increase value for the company strategically “doing well by doing good” (Franklin, 2008, p.2). These are also win-win relationships for organizations like the Red Cross because people like me can focus on helping people in disaster situations while our corporate partners do what they do well through financial and logistical support while meeting mutual goals.
Allen, C.A. (2002). Building mountains in a flat landscape: Investor relations in the post-Enron era. Corporate Communications: An International Journal, 7(4). pp. 206-211.
Belson, K. (2010, November 11). The financial and social payoff of corporate gifts. The New York Times. Retrieved from https://libproxy.usc.edu/login?url=http://search.proquest.com.libproxy.usc.edu/docview/763242291?accountid=14749 p. F.15.
Franklin, D. (2008, January 17). Just good for business: A special report on corporate social responsibility. The Economist, pp. 1-14.
In thinking about an example to use for this week’s assignment, I reflected on my experience as Director of Community Outreach at the American Red Cross. I clearly remember being on one of the first planes allowed to depart from San Jose airport to New York in order to respond to the September 11 attacks. This was my first large scale disaster and I did not know what to expect. It was a once in a lifetime experience, for many reasons, in which I realized how effectively the Red Cross works with corporate partners to leverage resources and expertise in order to respond to large scale disasters. Employees from American Express and other corporate partners were mobilized to staff feeding and sheltering centers along with other important sites were 9/11 family members gathered to wait for news.
Partnering with corporations was not only good for our disaster relief efforts, but it also allowed our corporate partners to give in different ways. Since corporate social responsibility (CSR) and investment relations were key topics during the readings this week, I found an article in the New York Times where the CEO of FedEx, Frederick W. Smith, was interviewed about the company’s giving and the reasons behind it. FedEx is a major Red Cross partner and during disaster relief operations each partner provides an expertise, in the case of the former they provide “logistics and financial support” (Belson, 2011, p. F.15) while the latter provides expertise in exactly what is needed on the ground. Mr. Smith made a clear statement at the beginning of his interview with Benson in which he explains that “it’s good business to be a good corporate citizen” (Benson, 2011, p. F.15). His statement aligns with the Franklin’s assertion that CSR can help a company create value (Franklin, 2008, p.2). This good citizenship is not only of value to the recipients but it also increases a company’s reputation (Franklin, 2008, p.2) which in turns helps companies develop some of the “trustworthiness” that Allen (2002) feels is important in investor relations (p.211).
After reading the full article, I deduced that FedEx would be a company that Franklin (2008) would highlight as having an effective CSR implementation. As highlighted in the article, FedEx’s CSR has evolved and it is strategically done by doing the following: 1) forging “relationships with organizations that are in the business of helping people...such the American Red Cross” (Benson, 2011, p. F.15); 2) setting a criteria for giving that focuses on their “business objectives or tends to further their goals as a corporation” (Benson, 2011, p. F.15); 3) creating a “budget every year for in-kind giving and flying in disaster relief” (Benson 2011, p. F.15); 4) and finally, embracing employee volunteering which as described in the article “is becoming an increasingly important part of corporate social responsibility” (Benson, 2011, p. F.15). I believe that Franklin would highlight FedEx as a model company since, based on the previous examples, its CSR “is not some separate activity that companies do on the side, a corner of corporate life reserved for virtue; it is good for business” (Franklin, 2008, p.3) and Mr. Smith would certainly agree (Benson, 2011, p. F.15).
In returning to investor relations, it seems like CSR not only helps “protect” a company’s reputation (Franklin, 2008, p.2), it also allows them to make strategic investments through corporate giving in places where they want to increase market share as done by FedEx (Benson, 2011, p. F.15). This in turn can yiled higher profits for the company, better brand recognition, and increase their level of goodwill and trustworthiness. In the era after Enron that Allen (2002) describes, and where Franklin (2008) and Benson (2011) point, investors are showing more concern with interests beyond the bottom line, CSR can become an effective unifying cause for companies and investors. Companies would do well in investing resources internally to better communicate to these stakeholders and use CSR to support their bridge building effort by making a company more attractive to other investors who might now take into account the amount companies spend on socially responsible causes. Customers certainly take this into account and this is why FedEx has been strategic in their giving (Benson, 2011, P. F.15).
Finally, in response to a question by Benson (2011) about how shareholders view corporate giving, Mr. Smith states that the “the evolution of thought about this has gone from the only purpose of a business is to create a return for shareholders to a broader responsibility to shareholders, communities, suppliers. That debate has not been resolved, but we know from our customer research and loyalty research that being a responsible corporate citizen, especially to younger cohorts, is enormously important” (Benson, 2011, p. F.15). This sense of responsibility positions a company to not only serve its investors, customers and communities, but to seriously look at ways in CSR can increase value for the company strategically “doing well by doing good” (Franklin, 2008, p.2). These are also win-win relationships for organizations like the Red Cross because people like me can focus on helping people in disaster situations while our corporate partners do what they do well through financial and logistical support while meeting mutual goals.
References
Allen, C.A. (2002). Building mountains in a flat landscape: Investor relations in the post-Enron era. Corporate Communications: An International Journal, 7(4). pp. 206-211.
Belson, K. (2010, November 11). The financial and social payoff of corporate gifts. The New York Times. Retrieved from https://libproxy.usc.edu/login?url=http://search.proquest.com.libproxy.usc.edu/docview/763242291?accountid=14749 p. F.15.
Franklin, D. (2008, January 17). Just good for business: A special report on corporate social responsibility. The Economist, pp. 1-14.
HOOPLA! (I call BS) – an attention grabber to a post about CSR
Hello all,
I find this week’s topic and discussion particularly interesting because it has deep-tissue massaged my entire brain by contrasting the hardcore right side of financial statement analysis with the “softer” left-side of discussing corporate ethics and citizenship through social responsibility.
Eccles, Ioannus & Serafeim (2012) , conclude by saying “Firms that embrace corporate social responsibility practices significantly outperform rivals that don’t embrace those practices, as measured by both financial and stock market returns. Firms with a history of commitment to sustainability and social issues also boast more long-term investors and place a greater emphasis on making nonfinancial disclosures.
I think his makes for a great closing to this post and a great discussion starter.
JMA
References
Franklin, D. (2008) Just Good Business: A Special Report on Corporate Social Responsibility, The Economist, January 19, pp.1-14 (full article)
Porter, M. and Kramer, M.(2006) : The Link Between Competitive Advantage and Corporate Social Responsibility - Harvard Business Review – Retrieved from http://bit.ly/wQ8vWc
Eccles, Robert G., Ioannou, I. and Serafeim, G. (2012) The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance. Harvard Business School Working Paper No. 12-035 – Retrieved from www.hbs.edu/research/pdf/12-035.pdf http://bit.ly/xGQbvn
CSR - The Smart Way?
This week’s reading’s suggest that corporate social responsibility (CSR) is best achieved when an organization sticks to what it knows and when it is something that is affordable (cite, 2008). Warby Parker, an eyeglass manufacturer seems to have taken the right angle in their CSR campaign – for every pair of eyeglasses purchased through the web-based manufacturer, a pair of glasses is provided to someone in need (“Buy a pair, give a pair,” 2012). Warby Parker either provides a pair of glasses or funding to non-profit partners like VisionSpring who help those in need of vision assistance.
Warby Parker is staying within its area of expertise – eyeglasses – and found a way to help others with a direct tie-in to their main product line. While the company’s website states that they will provides glasses or funding, I imagine that providing glasses is a more economical alternative to the funding. They could easily use overstock from glasses that have not sold for donation.
The connection between the eyeglass manufacturer and the non-profit is secure as one of Warby Parker’s co-founders previously served on the board of directors for VisionSpring. The company has distributed more than 85,000 pairs of glasses to those who need them (“Buy a pair, give a pair,” 2012).
References
Buy a pair, give a pair. (2012). WarbyParker.com. Retrieved from http://www.warbyparker.com/do-good#buy-a-pair-give-a-pair.
Franklin, D. (2008) Just Good Business: A Special Report on Corporate Social Responsibility, The Economist, January 19, pp.1-14
Calls for Reform and Telling the Truth
This week, the booklet by Merrill Lynch (2000) attempted to
help us understand some of the more fundamental aspects of a financial report
in the hopes that this would make us a bit savvier when in came to being
investors. But what happens when you know how to understand a financial report,
but can’t rely on the numbers contained in it?
I may have previously mentioned that I work for a state
agency that regulates certified public accountants. And while I am no great fan
of numbers, myself, and know very little about financial reports and what
they’re supposed to indicate, I am fortunate enough to have coworkers who are
well versed in this area. For a different perspective on this week’s readings,
I decided to visit with one of those coworkers.
I turned to a coworker who is a CPA and currently works as
an attorney in my agency’s Enforcement Division. She began her career as an
auditor in the 1980s and I thought she might be able to offer some interesting insights
about the regulatory changes that have occurred in the financial industry and whether she
believed the “calls for reform” after Enron had made a difference. I also
wanted to hear her thoughts about the idea corporate social responsibility
(Franklin, 2008).
What I learned from my coworker is that she has seen several
calls for reform: in the 80s after the savings and loan crisis, in the late 90s
after the dot com bust and then again after Enron (personal communication,
March 7, 2012). She likened the calls for reform to “closing the barn door
after the horse has run down the road” (personal communication, March 7, 2012).
When I asked her if she thought the calls for reform had led
to more clarity in the financial communications presented by companies, her
feelings seemed mixed. She said that she felt clarity was important, but that
the only way the public ability to know if financial reports are reliable
depends on what the auditor sheds light on. If auditors can’t or won’t shed
light on discrepancies then the information is flawed (personal communication,
March 7, 2012).
On the other hand, she said that something you will see on
financial reports now is the warning that investments are high risk. This, she
feels, was a result of what happened at Enron (personal communication, March 7,
2012). As my coworker sees it, this is a good thing; neither too much trust nor
too much emotion should be connected with issues of finance (personal
communication, March 7, 2012).
When it comes to corporate social responsibility, my coworker’s
point of pretty straightforward. Corporate social responsibility is equal to
companies telling the truth (personal communication, March 7, 2012). It’s that
simple.
References
Merrill Lynch. (2000). How To Read A Financial
Report Merrill Lynch, Pierce, Fenner & Smith Incorporated
Franklin, D. (2008) Just Good Business:
A Special Report on Corporate Social Responsibility, The Economist, January 19, pp.1-14
Allen, C. (2002) Building Mountains in
a Flat Landscape: Investor Relations in the post-Enron Era, Corporate Communications: An International Journal,
Volume 7 (2), pp. 206-211 (full article)
Corporate Social Responsibility Backlash?
This week’s readings about the emergence of Corporate Social Responsibility (CSR) were incredibly insightful. Not only did the readings discuss the many defining characteristics of CSR, but they also explained an organization’s reasoning and method for initiating it. I read an article aptly titled Corporate Social Responsibility by Lindgreen & Swaen to compare, contrast, and draw connections between this week’s readings. Lindgreen & Swaen do not firmly believe in CSR, nor do they fully dislike its composition either. Their research includes the positive and negative aspects of CSR. Personally, I think CSR is absolutely imperative for an organization’s image. An organization, which is viewed in a positive manner, has the upper hand and trust of the public.
Yet, an organization’s motivation for conducting CSR can be questioned as a deceptive ploy to win the hearts of consumers and the public. Is every attempt at CSR necessarily a lie? No, according to Lindgreen & Swaen (2010), “many consider it necessary for organizations to define their roles in society and apply social and ethical standards to their businesses” (p. 1). This week’s articles about Enron shine an even brighter light on the culpability of an organization. Organizations need not only worry about themselves. High earning organizations must participate in giving back, if you will.
Giving back to one’s community is noble. Additionally, giving back to one’s community also builds the organization’s morale. According to the reading in The Economist, CSR is an internal managerial morale builder because its employees are enthused to be a part of an organization with values (Franklin, 2008). Lindgreen & Swaen agree with those sentiments and state that overall performance is raised and stakeholders respond exceptionally well (2010). Communications between management and its stakeholders is key and, thusly, CSR is imperative. CSR is about communicating your self-worth, not your net-worth. Allen’s (2002) focus on “Enronitis” casted a discerning shadow over Enron and similar organizations that could not see past their own hubris (p. 206).
Enron, so badly, wanted to be the “It Girl” (McLean, 2001, p.1) that it was willing to do anything possible to be the topic of conversation on Wall Street every morning, noon, and night. Lindgreen & Swaen’s work suggests that if Enron had CSR in place, the organization could have improved its image (2010). Saying that Enron could have improved its image is a stretch because it was so far gone for many years, but if the organization had implemented CSR from its conception, then it could have become an entirely different company. One could make the case that Enron’s destruction birthed a new CSR standard amongst organizations in the 21st Century.
Further, Lindgreen & Swaen agree with The Economist’s three layers of CSR. They, too, acknowledge Michael Porter and Mark Kramer’s paper about CSR in the Harvard Business Review. However, Lindgreen & Swaen (2010) noted that Porter and Kramer’s wrote about the uncertainty of CSR actually working in an organization due to the lack of theoretical support (Porter & Kramer, 2006). Lindgreen & Swaen further stated that CSR can be portrayed as a radical development and that it could disrupt an organization’s climate and culture (2010). Nevertheless, Lindgreen & Swaen also agree with Porter & Kramer because CSR helps organizations differentiate themselves from competitors by using non-economical factors, which also lead to driving corporate, consumer, and employee interest (2010). If CSR is communicated in the wrong way, a backlash from stakeholders could occur. Therefore, Lindgreen & Swaen (2010) affirm the belief that CSR is not always a good thing to implement into an organization (p. 3).
References
Allen, C. E. (2002). Building mountains in a flat landscape: investor relations in the post Enron era. Corporate Communications: An International Journal, 7(4), 206-211.
Franklin, D. (2008, January 17) Just Good Business: A Special Report on Corporate Social Responsibility, The Economist. Retrieved from http://www.economist.com/node/10491077
Lindgreen, A. & Swaen, V. (2010). Corporate Social Responsibility. International Journal of Management Reviews, 12(1), 1–7.
McLean, B., (2006, January 19). Is Enron Overpriced? Retrieved from http://money.cnn.com/2006/01/13/news/companies/enronoriginal_fortune/index.htm
Porter, M.E. & Kramer, M.R. (2006). Strategy and society: the link between competitive advantage and corporate social responsibility. Harvard Business Review. Retrieved from http://efcsrconsulting.com/documents/events/ccc2008/Mark-Kramer-
Keynote/Strategy-Society.PDF
Yet, an organization’s motivation for conducting CSR can be questioned as a deceptive ploy to win the hearts of consumers and the public. Is every attempt at CSR necessarily a lie? No, according to Lindgreen & Swaen (2010), “many consider it necessary for organizations to define their roles in society and apply social and ethical standards to their businesses” (p. 1). This week’s articles about Enron shine an even brighter light on the culpability of an organization. Organizations need not only worry about themselves. High earning organizations must participate in giving back, if you will.
Giving back to one’s community is noble. Additionally, giving back to one’s community also builds the organization’s morale. According to the reading in The Economist, CSR is an internal managerial morale builder because its employees are enthused to be a part of an organization with values (Franklin, 2008). Lindgreen & Swaen agree with those sentiments and state that overall performance is raised and stakeholders respond exceptionally well (2010). Communications between management and its stakeholders is key and, thusly, CSR is imperative. CSR is about communicating your self-worth, not your net-worth. Allen’s (2002) focus on “Enronitis” casted a discerning shadow over Enron and similar organizations that could not see past their own hubris (p. 206).
Enron, so badly, wanted to be the “It Girl” (McLean, 2001, p.1) that it was willing to do anything possible to be the topic of conversation on Wall Street every morning, noon, and night. Lindgreen & Swaen’s work suggests that if Enron had CSR in place, the organization could have improved its image (2010). Saying that Enron could have improved its image is a stretch because it was so far gone for many years, but if the organization had implemented CSR from its conception, then it could have become an entirely different company. One could make the case that Enron’s destruction birthed a new CSR standard amongst organizations in the 21st Century.
Further, Lindgreen & Swaen agree with The Economist’s three layers of CSR. They, too, acknowledge Michael Porter and Mark Kramer’s paper about CSR in the Harvard Business Review. However, Lindgreen & Swaen (2010) noted that Porter and Kramer’s wrote about the uncertainty of CSR actually working in an organization due to the lack of theoretical support (Porter & Kramer, 2006). Lindgreen & Swaen further stated that CSR can be portrayed as a radical development and that it could disrupt an organization’s climate and culture (2010). Nevertheless, Lindgreen & Swaen also agree with Porter & Kramer because CSR helps organizations differentiate themselves from competitors by using non-economical factors, which also lead to driving corporate, consumer, and employee interest (2010). If CSR is communicated in the wrong way, a backlash from stakeholders could occur. Therefore, Lindgreen & Swaen (2010) affirm the belief that CSR is not always a good thing to implement into an organization (p. 3).
References
Allen, C. E. (2002). Building mountains in a flat landscape: investor relations in the post Enron era. Corporate Communications: An International Journal, 7(4), 206-211.
Franklin, D. (2008, January 17) Just Good Business: A Special Report on Corporate Social Responsibility, The Economist. Retrieved from http://www.economist.com/node/10491077
Lindgreen, A. & Swaen, V. (2010). Corporate Social Responsibility. International Journal of Management Reviews, 12(1), 1–7.
McLean, B., (2006, January 19). Is Enron Overpriced? Retrieved from http://money.cnn.com/2006/01/13/news/companies/enronoriginal_fortune/index.htm
Porter, M.E. & Kramer, M.R. (2006). Strategy and society: the link between competitive advantage and corporate social responsibility. Harvard Business Review. Retrieved from http://efcsrconsulting.com/documents/events/ccc2008/Mark-Kramer-
Keynote/Strategy-Society.PDF
Friday, March 9, 2012
Samsung's approach to CSR
While I was interviewing for my current role, one of the
most intriguing portion of the job description was getting Samsung’s Community
Involvement Committee put together. Several years earlier, our PR director put
a small CIC together, but the group mainly consisted of people who were appointed
to the position and didn’t care about it. They also didn’t really do much: they
went to DFW to greet the troops and held coat drives in the winter. About a
year after it was formed, it fizzled out. It then became my former boss’ pet
project, and he was determined to get it off the ground again. This is a
conversation I had with him, we’ll call him SP, and a member of the current
CIC, we’ll call her CC, about why corporate social responsibility is so
important to a company. SP was the senior director of human resources for
Samsung Mobile for seven years, and CC has been in PR at Samsung Mobile for
about four.
First I want to give you some background. Samsung’s worldwide
CSR platform is divided up into two umbrellas: region-wide (in my case, North America)
and subsidiary wide (in my case, Samsung Mobile). Region-wide, we have the NAHQ
CSR Council. It is responsible for big events, like a multi-million dollar
charity ball every year. They also work with schools across the country to fund
certain programs, especially in the software engineering field. Subsidiaries
are also responsible for CSR on a local level. My subsidiary has the Community
Involvement Committee; we are responsible for ensuring our employees are making
a difference in the communities where we live and work. We have three offices
in the Dallas area, and regional office sites in the Seattle area, San Jose,
Kansas City area, Atlanta, Herndon, VA and Bridgewater, NJ. We have home-based
employees who are expected to give back as well.
LM: SP, when I was interviewing for my job, you kept
mentioning the CIC. Why were you so passionate about it?
SP: Well, at the time, we only had Habitat [for Humanity].
That was good, but it wasn’t enough. We needed something to keep our employee
engaged and active the rest of the year, not just a few months in the fall.
LM: But if the CIC had failed once before, why did you think
it would work this time?
SP: It failed because it didn’t have the right people behind
it. [The PR director] was too busy with his daily fire drills, and most of the
other members were admins who were appointed to the committee. It started off
pretty strong and they had people behind them, but after a while, employees
stopped believing in what they were doing.
LM: When I started here, I got the committee up and running
in just a matter of months. We’ve sponsored more than 50 events in every
regional office site across the country and have engaged more than 500
employees. What’s different?
SP: A few things. First, the approach. Before you even
formed the committee, you communicated to the employees Samsung’s CSR beliefs. You
were able to associate [Samsung’s core value of] co-prosperity into all of your
communications and you branded the committee well. Second, you’re involving the
employees. One thing we did before you started was we looked at our [annual employee
satisfaction survey] results about what employees think about ways we give back
to the community. It sucked! We rated so low on that question that we knew
something had to change. You engaged the right people at the right time and
have been able to make a difference.
LM: CC, you are on the Samsung North American CSR council. How
important is CSR from a Samsung-wide perspective?
CC: Well like SP said, co-prosperity is king. We have to
engrain our values into our employees’ daily lives, or otherwise they won’t
believe in what we’re doing, they won’t buy into our programs and they won’t
trust what we tell them.
LM: Can you talk about some of the big Samsung-wide CSR
initiatives?
CC: The biggest initiative we have is called Hope for
Children, and it was started in the NAHQ CSR Council. It has grown since we
started it a few years ago from a smallish giving back to schools, but now it’s
the big, fancy ball every year in New York City with celebrities and football
players and media attention. Regis Philbin, Jennifer Lopez, Dan Marino and
Matthew McConaughey are always there and we have donated millions and millions
of dollars to their foundations over the years. We also have the Samsung Solve
for Tomorrow program, where we recognize one school every year in its measures
to incorporate technology into the classroom. We also partner with schools
across the country throughout the year to improve their engineering programs
and get students interested in that field. The overall Hope for Children
initiative focuses on education, health and green practices.
LM: CSR is a cultural thing. We are a very diverse company,
so how do you think we are able to appeal to everybody in what we do?
CC: As far as the CIC goes, the fact that the employees are
telling us what they want to do is how we appeal to them. Look at the race we
did last weekend. There were people from R&D, sales, marketing, finance,
legal, everywhere who came out to run. The Korean buy-in is also very important
because it shows our leaders that our employees are active. As [our president]
says, it’s not true volunteering if it’s on company time. You’ve got to go out
on your own time for it to be truly giving back.
LM: Thank you both so much for your time today!
Thursday, March 8, 2012
Interview with former Cause Marketing Director
I interviewed Vicki Kilmer, former Director of Cause Marketing for Best Friends Animal Society. Best Friends Animal Society is a non-profit, animal welfare organization with a 2009 annual reporting of $41,816,397.00 (http://www.bestfriends.org/aboutus/pdfs/09%20BFAS%20Audited%20FS.pdf, 2012).
L.D. - Vicki, thank you for taking the time to answer my questions about what separates cause marketing from corporate responsibility and how they can compliment each other.
V.K. - My pleasure. I'm happy to help.
L.D. - Can you define CM?
V.K. - Cause Marketing, also known as CRM, is an umbrella term that covers a range of marketing activity. The central definition is marketing partnership between a business and a non-profit entity for mutual benefit. It is not social marketing or campaign marketing.
L.D. - So, when you say it's not social marketing, do you mean that CRM is not CSR?
V.K. - Yes, those are two very different strategies. CSR is corporate philanthropy, the giving without the expectation of direct corporate gain. CRM is distinct from CSR in corporate dollars involved in CRM are not outright gifts to an organization and are not tax-deductible. Those Dawn Dish soap commercials are a good example of CSR. They are marketing themselves by showing how their product can help the wildlife in the community without directly partnering up with another corporation or any expectation of financial gain from this campaign.
L.D. - But aren't they hoping for a financial gain by this campaign? I mean, yes, it's a good thing Dawn is doing, but they will, or are hoping to, gain new customers from this. Dawn is banking on people buying their product because they are doing this philanthropic thing for the community.
V.K. - That's true they are still technically selling their product, but the difference is they are not connected to a particular entity that they will benefit from as a result of this CSR campaign. For example, if Dawn ran this same campaign but said $1.00 from ever sale of Dawn would go to a particular wildlife rescue organization, that would be an example of CRM. In turn the rescue organization would promote Dawn in some way to their donors and members, and Dawn would be making a tax-deductible contribution.
L.D. - Okay, that makes sense. Is it fair to say that even though on the surface CSR appears to just be doing good to do good? However, it majority of the campaigns seem to be strategic in nature. Like the Dawn campaign, that launched after the B.P. oil spill.
V.K. - That's a good point, and yes, most CSR campaigns are attached to something of the moment. Not all are based on trying to capitalize or attach themselves tragic events, though.
L.D. - In one of my readings for this week, Daniel Franklin, infers that big business is using CSR as a front to tell the world that they are doing good things, and in essence, jumping onto the CSR bandwagon (2008). Do you think that's true?
V.K. - Do you mean, do I think companies that are not really philanthropic in nature are trying to take advantage of CSR and use that to their advantage to appear to be responsible?
L.D. - Yes, that's what I mean.
V.K. - That's a subjective question. I mean, if the company was under fire for child labor and then suddenly started a campaign that exposed child labor camps, then yes, I think that would be a suspicious use of CSR. But, if the same company had no record of violating child labor laws, but suddenly started a CSR campaign because another, say competitor, was under scrutiny, I would think that was a strategic, competitive move on their part.
L.D. - That brings up another point of trust. In another reading, trust in corporations has gone through a dramatic change since the Enron era (Allen, 2002). Many companies like AIG tried to separate themselves from Enron by becoming transparent with their earnings and other corporate communications (Allen, 2002). Is that, in your opinion, a form of CSR?
V.K. - Yes, I think it is. The more transparent a company is, the more trust it can glean, the more it appears to serve the community. It's a different, indirect form of CSR, but I think it would still fall under the umbrella.
L.D - You've been very helpful, Vicki. Thank you for your time and sharing your thoughts on this matter.
V.K. - You're welcome, Lisa. Good luck.
From this interview I learned that CSR and CRM are related in nature but have very distinct strategies and motives. CRM is not the use of marketing techniques to impact societal behavior (e.g. stop smoking, don't pollute, don't drive drunk). CRM is a partnership where both players gain something from combined efforts. CSR is societal campaigns without the expectation of direct corporate gain. However, it would appear that both forms are not purely philanthropic. The strategies directly and indirectly are positioned for corporate exposure and, in the end, financial gain.
References
Allen, C. E. (2002). Building mountains in a flat landscape: investor relations in the post Enron era. Corporate Communications: An International Journal, 7(4), 206-211
Best Friends Animal Society. (2012). Retrieved from http://www.bestfriends.org/aboutus/pdfs/09%20BFAS%20Audited%20FS.pdf
Franklin, D. (2008, January 17). Just good business. The Economist, pp. 1-6.
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