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Chapter 14

Ethics – seasoning or ingredient?

&

Corporate Social Responsibility

Organizational and Managerial Communication

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Two views of ethics

• Seasoning metaphor– Salt to camouflage the bad taste?

• Ingredient metaphor (integrated view)– Integral part of the meal?– Integrating character with actions.

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What is ethics?

• Derived from Greek ethos• Rules or standards of right behavior towards

others• Includes teaching these rules or standards and

their practical application• Aristotle

– Who we are is as important as what we do– Have to start with the character of the person, its

formation and content – the whole human being

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Connection to corporate communication

• Formulating and sending messages that influence many people

• Relationship between stakeholders is an ethical one

• How one relates to others• Ethics inextricably connected to corporate

communication• Ignoring this can have consequences for

organization and ourselves

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Responsibility and dialogue

• Indirect responsibility

• Openness to what is being marketed

• Willingness to engage in dialogue– Those who are part of one’s own organization– Those to whom the messages are directed

• Lack of communication fails to respect the other party’s humanity

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Identity, Brand Building and Ethics

• Closely related• The process involves many people• Two levels

– Meeting between character of individuals and profession or organization

– Organization itself – definition of what it wants to be – its values and standards

• Act ethical as long as it is profitable?

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Moral Preparedness

• Brand building requires serious reflection

• Identity is not invented overnight

• Ethical ideas need to be stated up front as both internal and external signals

• Individuals must decide what their concept of the good life is

• Read Plato

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Corporate social responsibility

• A mission or purpose for existing that includes

more than creating shareholder value and profits.

• Corporate citizenship -- policy and practice of a

corporation’s social involvement over and beyond

its legal obligations for the benefit of society.

PHILANTHROPIC ACTIVITY

Improve the quality of lifeBe a good corporate citizen

Contribute to the community

ETHICAL RESPONSIBILITYAvoid harm

Do what is right, just, fair

LEGAL RESPONSIBILITY

Play by the rules of the game

Obey the law -- it is society’s codification of right and wrong

ECONOMIC RESPONSIBILITY

Be profitable

Pyramid of Corporate Social Responsibility, Carroll 1991.

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Corporate Image Dimension

• Values and Programs– Concern with the environment

• programs to protect or improve the environment and make more effective use of natural resources

– Social Responsibility -- • contributing to community programs, supporting artistic

and social activities and generally trying to improve the welfare of society

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Corporate citizenship issues

• Corporate governance• Environment• Human rights and the workplace• Fair trade• Ethical investment• The arms trade• Tobacco• Animal welfare and protection• Education

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If they don't say enough about their charity links consumers believe that companies are hiding something and if they say too much they believe that charities are being exploited by the big corporations. It makes the promotion of such schemes one of the most delicate jobs in marketing. Go too far one way and consumers believe you are using the charity, go the other way and they will not even know of your involvement (Tom O'Sullivan, 1997).

 

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Cause related marketing

The process of formulating and implementing marketing activities that are characterized by contributing a specific amount to a non-profit organization that in turn causes customers to engage in revenue-providing exchanges.

C. Caywood, 1997

Linking a worthwhile charitable cause in a market to the growth of a business through the fusion of marketing, public relations, promotion, and special events.

Mullen, 1997

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Cause related marketing

Using marketing money, techniques and strategies to support worthwhile causes while at the same time building the business.

Commercial activity by which businesses and charities or causes form a partnership with each other to market an image,product or service for mutual benefit.

Adkins, 2000

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Need for CSR as part of mission

• CSR must have prominent place in firm’s core mission and vision

• Mission should be well explained, widely understood and shared

• Must be willing to ‘walk the talk’

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Organizational Strategy(Mission statement reflecting corporate position

on social responsibility)

Corporate Social Responsibility Strategy(Which charities/causes, etc. to support)

CSR Communication Strategy (CRM)(Strategy for communicating organization’s

position on social responsibility)

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• Skeptics– distrust of firm to actually donate– perceived triviality of donated amount– perceived inequity of donation to firm benefit– potential misuse of CRM campaign– question motivations

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Norwegian Research -- 1999

 USA

UK NorwayAwareness of companies supporting causes 79% 68% 7.5%

Likely to switch to brands that claim to help a cause 76% 86% 35.5%

Likely to pay more for a brand that supports a cause 54% 45% 29.2%

More likely to buy product that supports a cause 78% N/A 46.3%

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Research from Norway

• It is less important what companies support -- rather it is more important that companies support something.

• For Norwegians, the motivation of the company is more important than what is supported.

• The more cynical a company’s motivation, the more consumers are skeptical.

• This is particularly true of customers’ with higher education.

• Consumers want information that companies support good causes.

• CRM creates extra value for the customer.

• CRM is accepted even when consumers know it is being done to get them to purchase.

• Given that price and quality are equal, brands that support good causes are preferred.

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• It is important that consumers know how much money is given and what it is being used for.

• Norwegians are split in their opinions that there should be a natural link between the giver and receiver to achieve believability.

• Important aspects for credibility:– time span -- must be

long-term

– size of support must be significant

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• Most companies in Norway support or have supported a non-profit organization (non sports)

• Most support is through donations

• Estimated corporate support ca. 750 million NOK

• Ca. 50% support national causes, ca. 36% international and the rest local

• Only about 1/4 communicate their support, mostly through advertisements

• Firms use support to position themselves, to create goodwill with stakeholders, to show support for society and to create confidence in their brand, identity and image

• Showing social responsibility is the most important

• Almost no company evaluates the effectiveness of these programs

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“The next big thing in brands is social responsibility. It will be clever to say there is nothing different about our product or price, but we behave well.”

Wally Olins, corporate identity and image guru, quote in The Economist, 08.09.2001