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A manager from a major consumer-goods multinational, who was invited to ESADE to discuss with students the impact of marketing on society, explained that his company does not have a corporate social responsibility (CSR) strategy. This came as a surprise to the dozens of future graduates in management attending his talk. The audience belonged to “generation Z” and had a high level of social awareness. With his words, the manager was undermining their ambition to join a global company that would enable them to combine professional success with making the world a better place.
“CSR is our only strategy” said the manager immediately afterwards for our peace of mind. This simple statement redefines the ultimate meaning of CSR: there is no other option. We no longer talk about a satellite strategy for certain stakeholders – and we longer speculate about whether the CSR strategy was developed by the CEO’s daughter, or by a former technology director now working for one of the group’s companies. There can no longer be just one individual with the title of “CSR Director” managing a budget set by the CEO each year. There is no longer a specific activity that oscillates between greenwashing and crisis communication. The only option for companies today is to ensure that their competitive strategy is simultaneously an expression of their CSR.
The questions posed below illustrate why many managers now see CSR as the only strategic option. What are the basic concepts underpinning CSR, and what is the recommended process for readers who want to explore its viability?
Can companies integrate ethics and CSR into their strategy as a source of competitive advantages? In 2011, Professor Michael Porter, creator of concepts such as generic competitive strategies, published a proposal on how to compete in the current environment. In it, helists various actions that can improve a company’s competitiveness while simultaneously improving social and economic conditions in the communities where it operates. These improvements must be simultaneous, or CSR runs the risk of being perceived as an unnecessary cost.
Can companies create competitive advantages based on their social impact? Yes, they can – and should – by acting on simple marketing logic. CSR does not just reflect goodwill; it reflects an understanding that millennials want companies with CEOs who express political opinions (44%, according to a study by Shandwick) and hold positions on social issues such as immigration and diversity (47%). Generation Z (those born in the mid-1990s) are now entering the labour market, earning and spending money. They prefer companies that oppose poverty and support green policies and human rights – and they will chose these companies.
Can such CSR offer real value to clients? Here we can find some of the best current marketing practices. Corporate brands may be well known, but they don’t really excite consumers. The companies that do capture this excitement are those which have developed “purpose brands” – brands that tell clients that they fulfil a social purpose. These clients are a segment called “belief-driven buyers”, who buy brands that stand for something. They see brands as entities, some of which have a social purpose.
Do general consumers appreciate purpose brands? Purchasing processes have become complex in many dimensions: online and offline channels; own and private brands; private and social benefit. It is in a scenario of increasingly complex purchasing processes that my research with Dr. Casabayó has revealed a new paradigm: “soul marketing”. This approach requires companies to create value for consumers who are also citizens and professionals. Purpose brands are directed at these three roles, and this multiplies their effectiveness. In our activity as consultants, we have found that employees are the priority stakeholder when generating social value: they are the first to value being associated with companies that have a soul.
Can companies carry out their activity alongside a changing social sector? Charity organisations are expanding worldwide, even as the public resources allocated to them are decreasing. For the social sector, private companies have stopped being enemies and have become uncomfortable but indispensable partners. Companies want to align their CSR strategies with their business objectives, and this means that charities must think more strategically and show companies how to achieve win-win results.
We are entering an increasingly unstable environment where a growing number of CSR projects are crisscrossing the path of businesses. In a briefing to a creative agency, Hewlett-Packard indicated that greater diversity in its advertising led to an increase in sales. Ikea has announced that starting in 2020 it will only use recycled wood. Nespresso has replaced Jack Black with a Guatemalan cooperative farmer.
CSR is becoming the only strategy.
March 13, 2019 at 10:56AM
Forbes – Entrepreneurs