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Corporate Social Responsibility A Tool For Marketing Strategy Commerce Essay

The guideline explains how to prepare your paper in printer-ready format for the International Scientific Conference of the Romanian German-University of Sibiu, so that its appearance is clear and consistent with the other papers in the proceedings. It includes guidance on layout, illustrations, text style and references, presented exactly as your paper should appear. It is highly advised to use URGS Conference 2012 Template and strictly follow the instructions to prepare your paper in Microsoft Word 2003 or later versions. The abstract portion is a narrative presentation without references. The abstract should give a concise and informative description of the paper, in 200 - 300 words, written to interest the reader as well as for information retrieval.

Keywords: no, more, than, 5, keywords

JEL (Journal of Economic Literature) Classification:

http://www.aeaweb.org/journal/jel_class_system.html

1. INTRODUCTION

Companies and their managers find themselves in an uncertain environment. This happens of the ever changing conditions that occur on the global economic market. Due to the changes and improvements of the new information and communication technologies, the companies and their managers find it harder and harder to reach an convince their clients or consumers. It is mandatory that these managers use all the potential promoting techniques in order to attract the consumers. It is no longer just about the usage of standard advertising techniques, the marketing specialists must take into account several other methods of advertising like online social networks, viral marketing, corporate social responsibility etc. In our paper we are underlining the importance of the Corporate Social Responsibility from the marketing point of view and especially of using this tool as a brand notoriety increasing factor. We live a world of continuous change, were mankind’s influence on the environment is larger and larger. But Corporate Social Responsibility (CSR) is not just about the environment like many people think. The organizations of the entire world become more and more preoccupied by the necessity and the benefits of a responsible approach to society.

2. THE CONCEPT OF CORPORATE SOCIAL RESPONSIBILITY

The concept of Corporate Social Responsibility (CSR) has first appeared in business for the first time in the second part of the 18th Century in the USA as a form of philanthropy, or donating to organizations / individuals in need (Sethi, 1977, in Bronn and Vrioni, 2001).

From a historical point of view, the concept of Corporate Social Responsibility has become an important field of study, associated with management, in the 1950’s. One important aspect to this development of CSR, was presented by Frank Adams in 1951, when he wrote in a Harvard Business Review about the importance of good citizens that should become professionals of the top management level (Banerjee, 2007, p. 5).

Other authors state that CSR is concerned with treating the stakeholders of the firm ethically or in a socially responsible manner. Stakeholders exist both within a firm and outside. Consequently, behaving socially responsibly will increase the human development of stakeholders both within and outside the corporation.” (Hopkins M. 1998)

The performance of each organization, no matter its type (private, public, economical or NGO), is linked to the degree of development of their communities and in their social environment. Also the impact of such organizations on the environment has become an vital aspect which reflects the human interest for preserving the natural ecosystems and the pollution. This first aspect is joined by other elements of interests like: social equality and good governance.

In 2001, the European Commission has defined CSR as: a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis (EU Commission, 2001)

Over the years, the concept of Corporate Social Responsibility has become more present in the everyday life of corporations and even public administration institutions. There were numerous efforts to define this concept, but often no clear definition is given, making theoretical development and measurement difficult.

Mallen Baker (2004) states that CSR is about how companies manage the business processes to produce an overall positive impact on society. According to the World Business Council for Sustainable Development considers corporate Social Responsibility as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large (Baker, 2004).

Also in 2001 (McWilliams and Siege, 2006), CSR is defined as: situations where the firm goes beyond compliance and engages in actions that appear to further some social good, beyond the interests of the firm and that which is required by law.

The concept of Corporate Social Responsibility usually refers to a couple of important elements like: (1) a collection of policies and practices linked to relationship with key stakeholders, values, compliance with legal requirements, and respect for people, communities and the environment; (2) the commitment of business to contribute to sustainable development, commonly understood as sustainable development is the ability of the current generation to meet its needs without compromising the ability of future generations to meet theirs objectives. (ECRC, accessed in October 2012).

Corporate social responsibility (CSR) is the way a corporation achieves a balance among its economic, social, and environmental responsibilities in its operations so as to address shareholder and other stakeholder expectations. It is known by many names, including corporate

responsibility, corporate accountability, corporate ethics, corporate citizenship, sustainability, stewardship, and triple-E bottom line (economical, ethical, and environmental;) (.

After a careful analysis of the above mentioned concepts we can underline several important aspects of the CSR concept:

Companies and organizations in general must act responsibly with regard to their environment;

The concept of corporate social responsibility must integrate social, environmental and education aspects in their day to day activities;

The usage of corporate social responsibility in ones company must have a positive impact on the organization and on society;

All the activities integrated in the CSR scope must have an ethical aspect which must not by crossed.

Following the 2001, EU Commission definition, the European Commission has defined the concept of Corporate Social Responsibility as the responsibility of enterprises for their impacts on society (EU Commission, 2011). The same paper underline that enterprises should have in place a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders, with the aim of: (1) Maximizing the creation of shared value for their owners/shareholders and for their other stakeholders and society at large; (2) Identifying, preventing and mitigating their possible adverse impacts.

3. PRINCIPLES OF IMPLENETING A CORPORATE SOCIAL RESPONSIBILITY STRATEGY FOR MARKETING PURPOSES

In order to create a proper Corporate Social Responsibility Strategy, and to use this important tool in the marketing aspect of the organization, companies must adhere to several important principles that we consider to be of great importance of the companies (ISQ, 2012):

Ethics and transparency – accordance to the principles of ethics, honesty, mutual respect, trust between the parties, integrity and transparency in business, combat the traffic of influence, offering or receiving bribes and corruption in the public and private stakeholders and influence in this fight, as well how to promote fair trade practices.

Fundamental Human Rights - fully respect the protection of fundamental human rights based on the Universal Declaration of Human Rights and incorporating into their practices, the principles of fundamental United Nations and International Labor Organization Conventions. Recognize the right of all workers to form trade unions and representative bodies of workers and to comply with these organizations and respect the effective right to collective bargaining.

Good governance - Organizational commitment to the practices integrated into the social, environmental and economic leadership to the organization, seeking to reduce exposure to risks of economic, environmental and social activities, implementing requirements, standards and documents, to ensure its continuity.

Dialogue with stakeholders - Rely on dialogue as the only legitimate means of achieving persuasion, resolving disagreements and conflict resolution. Ensure an open, transparent and trust relation with the various stakeholders, establish channels of consultation with stakeholders and incorporate their concerns, and report a credible and objective performance in its economic, environmental and social.

Value Creation - Promote management of high quality products/services and processes by integrating environmental and social aspects in planning and decision making. Promote investment in research and development and incorporating innovation in your products/services and processes.

Diversity and equality - Respect and value differences as a fundamental condition for the existence of an ethical development of humanity and seek to encourage the promotion of cultural diversity, social and ethnic difference as a positive development of the organization's mission, not tolerating discrimination under any pretext.

Environmental Protection and Management - Promote projects, initiatives and good practices that contribute to the preservation of the environment. Investing in sustainable technologies and products and enhance the ecological dimension and eco-efficiency.

Development of local communities - Support initiatives to promote social, economic and cultural, based on transparent criteria for evaluation of relevance to the community. Promote the participation and involvement in volunteer work.

Responsible Marketing - Lead the marketing and communication policy of respect for truth, transparency, consistency and integrity of assertions, reflecting the organization's values. Encourage ethical and responsible behavior from the public to environmental, social and citizenship.

4. USING CORPORATE SOCIAL RESPONSIBILITY IN MARKETING

The concept of Corporate Social Responsibility as we can see it has a great impact on many of the organizations departments and functions. We can not discuss the concept of CSR without taking into consideration the environment, the ethical aspects of consumer communication, the implication in local community and many others. One of the most important aspects and activities that the Corporate Social Responsibility, is the promotion and advertising activities, that the companies undertake when developing CSR strategies and activities.

Even when the company undertakes, environmental protection activities, charitable activities, the assurance of diversity and equality and the development of local communities the organizations use them as marketing and brand notoriety increasing agent. Corporate responsibility policies have been gaining increasing attention from senior executives as questions of sustainability and green agendas have come to permeate business the world over.

The business and marketing environment have evolved greatly in the last 20 to 30 years. If we look back at the evolution of the economic world in the last century, we can clearly observe a clear development of this environment. Before we can start to understand the development of the corporate social responsibility as a marketing tool, we have to understand the evolution of the marketing concept in the last century. Philip Kotler has made a short presentation of the marketing concept evolution in his book Marketing 3.0 (2010):

Evolution

Marketing 1.0 – product orientation

Marketing 2.0 – consumer orientation

Marketing 3.0 – value orientation

Objective

To sale goods

To satisfy and keep clients

To make the world a better place

Potentiating factors

Industrial revolution

Information technology

New technology wave

The manner

in which companies see the market

Mass consumers with physical needs

A smarter consumer

A human being with heart and soul

The marketing fundamental concept

Product development

Differentiation

Values

Marketing general directions for the company

Product specification

Company and product positioning

The companies’ mission, vision and values

Proposal value

Functional

Functional and emotional

Functional, emotional and spiritual

Interaction with the consumers

Transaction between a company and several consumers

An individualized relationship

Cooperation between more companies and consumers

Source: Kotler, P., Kartajaya, H., Setiawan, I., Marketing 3.0 – de la produs la consumator

şi spiritul uman, Publica Publishing House, Bucharest, 2010, p. 20

As we can see for the above presented table, we find ourselves in the 3.0 marketing period which is considered to be the orientation of the entire marketing activity as an actor that create value for the consumer, the company and the society. So from what we can observe we can state that the two concepts have similar interests. Bur right now we find ourselves in the middle of an financial and economic crisis, this position has forced the companies to present themselves as trustworthy and responsible.

The companies and their managers have pursued easy-win strategies or activities with direct commercial benefits, such as measuring and reducing their corporate carbon footprints. Such activities undoubtedly bring some value to businesses and society, but they fall far short of the mark (Bhattacharya, 2011). What we are slowly starting to see is a second wave of corporate responsibility behavior marked by a clearer focus on the total business value such policies can bring. To fully benefit from corporate responsibility, businesses must wake up to the fact that they need to take a more indirect route to creating value with it. They must start by seeing where and how key stakeholders react to a firm's corporate responsibility initiatives.

In order to have a successful marketing campaign using CSR strategies and activities there are several steps that have to be taken into consideration (Yohannan, 2012):

Start Inside: Internal education and engagement is essential for the success of any CSR commitment and campaign. Defining CSR must work for the internal stakeholders based on the reality of business practices, their propensity for risk and desire for leadership.

Brand or Bust: Branding provides a way to tie disparate assets together and provides a framework for key audiences such as employees to contribute and share the company’s story.

Industry Matters: Understanding the material issues of the company are critical. While many companies focus on environment, philanthropy and diversity and inclusion, they may be missing compliance issues or areas that may lead to brand differentiation or leadership.

Efficiently Influence: Focusing on a handful of sustainability or key opinion leaders in the social space can elevate your company’s profile dramatically. Gaining CSR notoriety can provide a halo for an improved reputation and drive core business objectives such as license to operate and sales.

Measure Relentlessly: Know the end game. While CSR is a journey, it must deliver a spectrum of results every step of the way. Understand the urgency in the business and customize your marketing by audience and channel.

Of course there are several advantages for using corporate social responsibility as a marketing tool. Among the most important ones we must consider the following ones (Corporate Social Responsibility, 2007): (1) Enhanced reputation and brand image - Reputation is an important sustainable competitive advantage, because it is very hard to build and cannot be easily mimicked by competitors. A organisation's reputation results from trust by its stakeholders. A strong reputation in ethical environmental and social responsibility can help a organisation build this trust; (2) Increased profit and customer loyalty - Research has shown that there is a growing desire by consumers not only to buy good and safe products, but they also want to know that what they buy was produced in a socially and environmentally responsible way such as “sweatshop-free” and child-labor-free clothing, smaller environmental impact; (3) Creating new business opportunities - Experience gained through addressing CSR challenges also provides opportunities for organizations to create new business opportunities. (4) Increased ability to attract and retain employees - A organization’s dedication to CSR can be an important aid to recruitment and retention compared with competitors. People want to work for a organization that is in accordance with their own values and beliefs; (5) Increased productivity and morale - Committing CSR internally to improve working conditions, lessen environmental impacts can lead to increased productivity and staff morale where the workforce are more reliable, enthusiastic and efficient. (5) Innovation in market through cooperation with local communities - CSR requires cooperation with the local communities and relationships can be improved. This can help organisations in tailoring products and services as well as more rapid acceptance to local markets.

5. CONCLUSIONS

The concept of Corporate Social Responsibility is in the same time a new and a old one. As we were able to see, CSR has developed in practice since the late 1800 as philanthropic activities. But today, this concept has evolved to take into account several other aspects like: (1) environmental protection; (2) implication in local communities; (3) involvement in social, educational activities and (4) internal and external business environment. In order for the managers and their companies to bee successful in their marketing campaigns they must use CSR as a marketing tool following and being aware of several important principles: Ethics and transparency; Fundamental Human Rights; Good governance; Dialogue with stakeholders; Value Creation; Environmental Protection and Management; Development of local communities; Responsible Marketing. Using all these principles and a responsible CSR activity towards society, the consumer and ethics in general, the companies will have successful marketing and profitable activities.

7. AKNOWLEGMENTS

This work is part of the dissemination strategy of the Corporate Social Responsibility – CSR MATRIX project, co-funded from the Leonardo da Vinci – Transfer of Innovation, Project No: 2011-1-PT1-LEO05-08589 (www.csr-matrix.com).

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