CSR, community, your business and competitive advantage
Corporate social responsibility, or CSR for short, is 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.
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Some scholarly definitions of CSR are provided next:
The World Business Council for Sustainable Development (2000) defines CSR as …the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large.”
The World Bank (2014) also defines CSR as “the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life, in ways that are both good for business and good for development.”
Finally, Perez & Rodrıguez del Bosque (2014) also define CSR as company activities demonstrating the inclusion of social and environmental concerns in business operations, and in interactions with stakeholders…”
All said CSR concerns businesses seeking to achieve a monetary bottom-line not at the expense of the environment and people. This is referred to as the triple bottom-line where business is required to excel in profits, people and the environment.
As a practice, CSR has been in existence for more than three centuries in the west; however, not under the name CSR and firms were not under obligation to as it were “give back to society.”
It was only during the second half of the 20th century that attention began increasing on the subject of CSR and calls were made to have businesses accountable for their activities within the society.
In Ghana, the concept of CSR is fairly new and underdeveloped. Most firms understand CSR to mean philanthropy (constructing roads, drilling boreholes, awarding scholarships to needy, brilliant children), unlike their counterparts operating in the developed world which sees CSR as broad and includes other initiatives such as reducing carbon emissions and not discriminating against race, creed or physical ability in employing labour.
There are many reasons for this, one being the fact that the Ghanaian society requires business to aid the government in national development.
Empirical evidence garnered reveals that firms which engage in CSR stand a much better chance of winning and maintaining customers than those which do not engage in any form of CSR. Sen et al. (2006) realised that customers are reportedly more likely to purchase and re-purchase the products and services of socially responsible firms (see Sen et al, 2006) than those that are socially irresponsible.
Survey findings
Two-thirds of respondents from a survey conducted by Cone/Roper indicated they would switch brands and retailers to those participating in cause-related marketing. Additionally, Ross et al. found that 54 per cent of respondents in a survey indicated they were more likely to switch to a new brand as a result of cause-related marketing.
Ruiz de Maya (2007) also studied customers of a large financial services provider to ascertain the link between a company’s CSR and customer identification with the company as a result.
Findings showed that CSR activities exert a direct influence on company identity attractiveness and lead to positive affective, cognitive and behavioural consumer responses towards the company. In other words, CSR endears firms to customers.
In a recent study in Ghana, for instance, customers stated that they would speak more about a socially responsible company, use a wider range of its products and make repeat purchases as compared to a socially irresponsible one.
Hinson & Renner (2013) sought to ascertain which form (s) of CSR would generate the greatest behavioural and attitudinal responses from bank customers. Studied three types of CSR (corporate philanthropy, community volunteering and customer-centric CSR).
Respondents indicated their preference for philanthropy (drilling boreholes, building hospitals, providing electricity to rural areas) over customer-centric CSR (having good complaints handling, competence, efficiency and reliability), showing they would be more attracted to a bank which engages in philanthropy than even customer-centric CSR.
Apart from attracting customers, it has been proven that CSR also attracts other key stakeholders such as employees and investors. Meister (2012): In a survey, 53 per cent of workers said that “a job where I can make an impact” was important to their happiness, and 72 per cent of students about to enter the workforce agreed.
Most would even take a pay cut to achieve that goal. Additionally, research conducted by Cone Millennial Cause group found out that 80 per cent of a sample of 1,800 13-25 year olds wanted to work for a company that cares about how it impacts and contributes to society. More than half said they would refuse to work for an irresponsible corporation.
Hinson & Agbleze (2013) also researched Ghanaian stakeholder attraction to CSR initiatives of firms. They discovered that potential Ghanaian employees who are predisposed to CSR are more likely to identify with a firm’s CSR initiatives and, therefore, seek employment in same. — GB