This research was conducted as part of a capstone project through the M.S. in Public Relations and Corporate Communication program at New York University.
Corporate social responsibility is still a relatively new corporate function that continues to evolve. As companies begin to assess and measure the effects their CSR programs have on the business’s reputation and profitability, CSR will increase in both scope and importance. So how will the function change?
A recent study conducted by Julia Bonner and Adam Friedman examined this question using qua
litative and quantitative components. A survey was sent to more than 700 senior executives at Fortune 1000 companies via email over a period of 10 weeks, which generated 77 responses on behalf of those companies. In addition to a quantitative survey, 10 interviews were conducted with senior CSR executives from Fortune 500 companies including General Electric, IBM, Viacom, Pfizer, DuPont and Accenture.
One question sought to determine the level of involvement various parties had within the company in CSR-related decision making. Results confirm that key influencers are the C-suite and board of directors (82%). Results show other departments in the company have significant influence in the CSR process. Following the C-suite and board of directors, respondents said the legal (51%) and public relations (45%) departments were both involved nearly half the time when setting CSR strategies, and the sales (24%) and marketing (30%) departments were involved nearly a quarter of the time.
These results affirm CSR’s place within organizations. It is not an area isolated to the communication department or the C-suite. In most organizations, other departments have input in the process, which implies that CSR has permeated many disciplines within the organization
In a conversation with Justin Keeble, Senior Executive in Accenture’s Sustainability Services, on CSR-related decision making, he said decisions should be the responsibility of all departments in the corporation: “Our task is to embed this (CSR) into the consulting services we provide to our clients. We need to focus on integration. If we’re successful, we won’t be needed.”
Furthermore, in a discussion with Bob Corcoran, Vice President of Corporate Citizenship at General Electric (GE), he indicated that greater departmental involvement means greater effectiveness overall. Corcoran said, “I would submit that there is a correlation that the more embedded and real it (CSR) is or becomes in a corporation the smaller the CSR organization is because it is embedded in the muscle tissue of the company. When you see larger separate groups doing it in a company, I think it’s more likely that you’ll see white corpuscles in the corporation working to reject it because it’s somebody else doing it and it’s not my job.”
Another question addressed the effect on the business if it chose not to engage in CSR. Overwhelmingly, respondents said not engaging in CSR would have a negative effect on the company’s reputation (67%), and they also indicated the absence of CSR would have a negative effect on profitability (20%) confirming again that at least one in five businesses has a critical link between profits and CSR. While CSR may have initially been perceived as a “soft” discipline, today it has evolved into a policy that directly affects profitability.
This research shows that management must view CSR as an increasingly important function and should find ways to inject CSR strategies into all areas of their business to maximize the potential of their CSR strategies. As CSR becomes integrated into the fabric of businesses, practitioners contend that the best indication of successful CSR programs will be that company CSR practices will become part of every employee’s job description and responsibility.
Julia Bonner completed this research for her capstone project while a graduate student at NYU. Adam Friedman is an adjunct professor at NYU and with the firm Adam Friedman Associates.
Hi Vincent – thanks for your feedback and we’re glad you found the material useful. What you’re referring to is philanthropy, which is very different from CSR. In today’s world, token contributions mean very little and certainly don’t have the same effect on corporate reputations. We do believe today’s definition of CSR is a fairly new function compared to other corporate functions and believe it will continue to grow as companies become more transparent and accessible. We also think CSR legislation and increased stakeholder demand for transparent reporting and corporate reporting on CSR will continue to move the function from voluntary to mandatory. As you say this is no simple task, but we do think there is a growing high-level commitment to CSR and we plan to keep an eye on its evolution.
I hope that you continue your research efforts. This is interesting and useful. However, I would hesitate to say that corporate social responsibility is a new corporate function. History is replete with ruthless businessmen who were generous donors to communities, to education, and to the needy. Are corporations who give to cure breast cancer truely responsible when heart disease is the leading cause of death among women? There are no easy and simple answers to such questions, but they are certainly worth pursuing. Stick to it, please.
Douglas – Thanks for the comment. We absolutely agree. Hopefully we’ll see CSR networks grow in scope and size as state and private sectors begin to realize the effects and value of their CSR programs.
Joseph – Appreciate the feedback and am more than happy to send you the full report. Look forward to hearing the results of the study you plan to conduct as well.
I find your study very revealing in terms of its findings that I’ll be grateful to receive the full report for my detailed study. I currently put on three hats: (1) As an Adjunct Lecturer of PR at the Department of Communication & Media Studies at the University of Education, Winneba in Ghana; (2) Chairman of Education & Accreditation of the Institute of PR, Ghana; and, (3) Chairman of CSR Foundation, Ghana – an NGO with a vision to create a society of CSR-committed and compliant corporate citizens and individuals.
It is increasingly becoming obvious to organizations and its owners that they can’t operate or survive in isolation. Integrating forces from departments that deal with both social and economic environments of the the organization is a sure way to succeed in CSR activities. In Ghana, most organizations engage in individual CSR programmes to establish a favorable reputation. the absence of CSR network involving organizations from both state and private sectors have limited the effectiveness of CSR activities in Ghana.
Antonio – Thank you for your comment. We received similar feedback in our research indicating that CEO and top management support is critical in driving the company’s CSR programs. Reassuringly, we found that more than half the time (56%), C-suite executives and the board of directors are very involved in setting CSR strategy; in 44% of companies, the C-suite executives and board of directors are only somewhat involved in making decisions about the company’s CSR efforts. We agree and believe that as CSR beings to permeate other functions within an organization, it will become part of the company culture and not a separate add-on.
I fully agree that companies are becoming more and more aware of the importance of CSR, specially due to the effects on the reputation and profitability. In Angola, the country I live and work, there is an initiative led by UNDP and major companies to promote the practice of CSR. The companies in the oil & gas sector have already established an informal CSR network. Soon, there will be a national CSR network to include all economic sectors and every size of businesses.
However, I strongly believe that to have a sustainable practice of CSR, the companies will have to work hard to build the ethical culture in the organization and this has to be led by the CEO and the Board of Directors. Therefore, instead of thinking of the CSR as a separate matter, it has to be seen as a sub-product of the Business Ethics.