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Corporate Social Responsibility as an International Marketing Approach

©2009 Diplomarbeit 92 Seiten

Zusammenfassung

Inhaltsangabe:Introduction:
The purpose of this paper ‘Corporate Social Responsibility (CSR) as an International Marketing Approach’ is to identify an approach to merchandize corporate social responsibility on an international level. Solely promoting a company’s CSR initiatives and its philosophy globally has not yet been attempted. My intention is to illustrate the possibilities of promoting CSR internationally, due to the fact of the rising interest in the subject and the resulting pressure from the outside world.
To pursue this goal, general information about ‘corporate social responsibility’ will have to be illustrated, along with two basic examples at the beginning, so the reader can understand the main framework of CSR. It is shown how companies can evaluate the potential that lie behind the implementation, demonstrating benefits for the company itself and other parties that can profit from CSR initiatives.
Is CSR a product, a service or non of it? Is it possible to promote it as a whole? If not, how can something that is not a product or service be merchandized? These questions will be answered during the course of the paper. Possible problems of this approach during the analysis will be illustrated and swept aside with countermeasures.
To demonstrate the possibilities of using CSR as an international marketing tool, the aspects which can be of use to this approach will be identified. The approaches are underlined by examples making it easier for the reader to follow. Moreover parallels of CSR aspects will be demonstrated to clarify the similarities between them.
It has to be mentioned as well that there are approaches by companies to mislead consumers with false claims for their own profit. But countermeasures against these ‘black sheep’ have been taken and the result will be revealed.
What role does marketing really play for CSR? The relationship between a company’s CSR philosophy and its possible marketing approaches involve different kinds of commitment which will be looked at in detail. But companies also have the possibility to find prominent partners for their efforts to show their social involvement. As a consequence several parties can profit from it due to mutual engagement and goals.
In today’s times in which globalization plays a big role, a company’s CSR initiatives cannot be kept solely on a small scale but must be transferred onto an international level. The question how CSR aspects can be merchandized globally will […]

Leseprobe

Inhaltsverzeichnis


Kolja Paetzold
Corporate Social Responsibility as an International Marketing Approach
ISBN: 978-3-8366-4298-9
Herstellung: Diplomica® Verlag GmbH, Hamburg, 2010
Zugl. Fachhochschule Bonn-Rhein-Sieg, Bonn, Deutschland, Diplomarbeit, 2009
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II
Corporate Social Responsibility (CSR) as an International Marketing
Approach
List of Figures
III
List of Abbreviations... IV
1. Introduction... 1
2. The CSR Approach... 3
2.1 History and Definition of CSR... 3
2.2 Company`s Motivation for CSR ... 8
2.3 Examples of CSR carried out... 10
2.3.1 Investing in NGOs... 10
2.3.2 McDonalds CSR activities... 11
3. Benchmarking CSR... 18
3.1 Advantages of Benchmarking... 21
3.1.1 Advantages for the Company... 21
3.1.2 Advantages for the Stakeholders... 23
4. Role and Potential of CSR shown on 4 Aspects... 25
4.1 Human Resources... 25
4.2 Brand Differentiation... 30
4.3 Corporate Reputation... 33
4.4 Corporate Social Marketing... 34
4.5 Similarities between Aspects... 37
5. Critical Review on "Greenwashing"... 44
5.1 Green Marketing as a Countermeasure... 47
5.2 Possible Effects of Greenwashing... 50
6. CSR as a Marketing Approach... 52
6.1 The Role of Marketing in CSR... 52
6.2 CSR Marketing Commitments ­ The Company's Approach... 54
6.2.1 Corporate Cause Promotion... 54
6.2.2 Cause-Related Marketing... 56
6.2.3 Corporate Philanthropy... 60
6.2.4 Green Marketing... 62
6.3 NGOs as Most Prominent Partners for Companies... 63
7. International Valuation of CSR with focus on Marketing... 66
7.1 Transferring CSR to an International Marketing Level... 71
7.2 Examination of International Marketing Potential of CSR Activities... 73
8. Conclusion... 78
9. Bibliography... 81

III
List of Figures
Fig.1
Kellogg's Square Dealer
Fig.2
Categories of Consultants Selling CSR Services
Fig.3
Visual Accounts of CSR and Coexisting Labels
Fig.4
McDonald's "Corporate Responsibility: Oversight and Coordination
Fig.5
Acknowledgment of terms to be signed by potential suppliers
Fig.6
McDonald's Sustainable Supply Chain Vision
Fig.7
Nutrition-Facts on Product Packaging
Fig.8
Ronald McDonald House in Philadelphia
Fig.9
Ronald McDonald Family Room
Fig.10 Ronald McDonald Care Mobile
Fig.11 Aspects of Corporate Social Responsibility per Stakeholder
Fig.12 Ethical Brand Monitor
Fig.13 Subway's cosponsored message provides strong support for a
desired brand positioning
Fig.14 Own illustration: "The Relationship between CSR Aspects"
Fig.15 Own illustration: "The Relationship between CSR Aspects"
annotation of "I"
Fig.16 Own illustration: "The Relationship between CSR Aspects"
annotation of "II"
Fig.17 Examples of Eco labels
Fig.18 "Breakdown of the Seven Sins" in the American Market
Fig.19 Percentage of consumers who have punished companies for
being socially irresponsible, by region
Fig.20 "The Dave Matthews Band" promoting global warming through
Ben & Jerry's Ice Cream
Fig.21 2009 "Keep America Beautiful ­ Great American Clean Up"
Sponsors
Fig.22 Promotional material for American Express's campaign to help
reopen Lady Liberty
Fig.23 The Expanded Benefits of Cause Marketing
Fig.24 Elucidation of Benefits of CRM
Fig.25 Kenneth Cole ad with a philanthropic intention
Fig.26 Five-stage process model of internationalization
Fig.27 Market pioneer, early follower and late follower within the products
lifecycle
Fig.28 Fair Trade Logo

IV
List of Abbreviations
AFNCC
Arthritis Foundation, Northern California Chapter
BP
British/Beyond Petroleum
C
Corporate
CC
Corporate Citizenship
CDC
Center of Disease Control
CEO
Chief Executive Officer
CoC
Code of Conduct
CR
Corporate Reputation
CRM
Cause Related Marketing
CS
Corporate Social
CSM
Corporate Social Marketing
CSP
Corporate Social Performance
CSR
Corporate Social Responsibility
EBS
Educational Building Society
e.g.
exempli gratia ("for example")
etc.
et cetera ("and so forth")
HNWI
High-Net-Worth Investors
HR
Human Resources
HRM
Human Resource Management
i.e.
id est ("that is")
ISO
International Organization for Standardization
KLD
Kinder, Lydenberg and Domini
LBG
London Benchmarking Group
LOHAS
Lifestyle of Health and Sustainability
MNC
Multinational Corporation
NGO
Non-Governmental Organization

V
PGA
Professional Golfers Association
PR
Public Relations
RMFR
Ronald McDonald Family Room
RMH
Ronald McDonald House
RMHC
Ronald McDonald House Charities
SER
Sociaal Economische Raad
SR
Social Responsibility
SUV
Sports Utility Vehicle
US
United States

1
1. Introduction
The purpose of this paper "Corporate Social Responsibility (CSR) as an
International Marketing Approach" is to identify an approach to merchandize
corporate social responsibility on an international level. Solely promoting a
company's CSR initiatives and its philosophy globally has not yet been
attempted. My intention is to illustrate the possibilities of promoting CSR
internationally, due to the fact of the rising interest in the subject and the
resulting pressure from the outside world.
To pursue this goal, general information about "corporate social responsibility"
will have to be illustrated, along with two basic examples at the beginning, so
the reader can understand the main framework of CSR. It is shown how
companies can evaluate the potential that lie behind the implementation,
demonstrating benefits for the company itself and other parties that can profit
from CSR initiatives.
Is CSR a product, a service or non of it? Is it possible to promote it as a whole?
If not, how can something that is not a product or service be merchandized?
These questions will be answered during the course of the paper. Possible
problems of this approach during the analysis will be illustrated and swept aside
with countermeasures.
To demonstrate the possibilities of using CSR as an international marketing
tool, the aspects which can be of use to this approach will be identified. The
approaches are underlined by examples making it easier for the reader to
follow. Moreover parallels of CSR aspects will be demonstrated to clarify the
similarities between them.
It has to be mentioned as well that there are approaches by companies to
mislead consumers with false claims for their own profit. But countermeasures
against these "black sheep" have been taken and the result will be revealed.
What role does marketing really play for CSR? The relationship between a
company's CSR philosophy and its possible marketing approaches involve
different kinds of commitment which will be looked at in detail. But companies
also have the possibility to find prominent partners for their efforts to show their

2
social involvement. As a consequence several parties can profit from it due to
mutual engagement and goals.
In today's times in which globalization plays a big role, a company's CSR
initiatives cannot be kept solely on a small scale but must be transferred onto
an international level. The question how CSR aspects can be merchandized
globally will be examined.
Since the world's population is growing at a fast rate environmental problems
are steadily increasing. Therefore people became more and more conscious of
the possible consequences. They started to keep an eye on corporation's
involvement in respect to social and environmental problems, in order to
prevent further damage. This is the reason why CSR initiatives are gaining on
importance. The key aspects they are concentrating on are, among others, child
labor, equal human rights, discrimination of any kind.
In difficult times like these a lot of companies have understood their obligation
towards society at large, recognized the potential they have, and are willing to
play their part as a corporate citizen.

3
2. The CSR Approach
The general idea of the concept of corporate social responsibility (CSR) is that
society at large believes modern businesses should have more duties for
society and not just towards their shareholders, meaning to ensure long-term
wealth for the organization. They believe that their stakeholders: consumers,
employees, the community at large, government, and the natural environment
should be taken into stronger consideration. The CSR approach applies to all
sizes of organizations, but citizens focus on large companies because of their
high level of transparency.
This chapter defines the main frame of corporate social responsibility to fully
recognize its meaning and what stands behind this phrase. It is easier to
understand the importance of its role in these modern times, when a certain
basic knowledge is given. How CSR can be defined, what its historical
background is and why enterprises are suddenly increasing their interest in the
subject of being more responsible towards society and its environment? Most of
these questions will be answered in this first part of the paper.
2.1 History and Definitions of CSR
The idea of corporate social responsibility (CSR) can even be traced back to a
time before Christ was born. "In ancient Mesopotamia, around 1700 BC, a king
introduced a code in which builders, innkeepers or farmers were put to death if
their negligence caused the death of others, or major inconveniences to local
citizens."(BRASS, 2004)
The field of corporate social responsibility did not concentrate on the enterprise
as a whole, but on individuals such as their leaders. Society itself looked at how
these managers contributed to society through their companies.
In the 1950s, the focus of CSR shifted towards the actions taken by
organizations, and not by their head individuals. This made social responsibility
transparent to the companies' direct surrounding, so that citizens could see, or

4
estimate, to a certain degree how involved an organization was in the
environment in which it is operating.
This spawned the concepts of `corporate social responsiveness', and then
`corporate social performance' (CSP) in the 1980s.
In the 1990s the term `corporate sustainability' (CS) was introduced to stress
companies to take more awareness of environmental concerns. This underlined
the aspect that companies themselves, and not the management, were
accountable for their part in being socially active. One could say, the
organization became a person, a citizen, and thus the term `corporate
citizenship' (CC) was born. Inevitably there is no single definition of the
construct "corporate social responsibility" since there have been diversities on
interpretation, thus many terms have been applied equally when stating, what
"Corporate Social Responsibility" actually comprehends. There are a number of
similar terms that are often associated with CSR. This is the reason why many
authors refer to the meaning of CSR with a different word. Most commonly used
terms are: `corporate business responsibility' or `corporate business citizenship',
`corporate citizenship', `community relations' and `social responsibility'. Other
associated terms are enclosed within the CSR perspective: social and
environmental auditing, stakeholder theory, business ethics, sustainability,
environmental sustainability and strategic philanthropy are just to name a few.
The Kellogg Company is a good example of how CSR can be managed by a
multinational company over a period of more than one hundred years. Since
W.K. Kellogg founded the company in 1906, he sought to "invest my money in
people," and that legacy continues to guide the company and its people from
that point on to the future. The company understands that its social
responsibility extends to the quality of its products, and states that customers
can rely on Kellogg products to be "great-tasting, high-quality foods". Kellogg's
revenues in 2008 stood at 12, 8 billion US-Dollars. The company claims, "social
responsibility is a way of life at Kellogg", and it involves "investing in and
enriching our communities", "encouraging employee volunteerism" as well as a
"commitment to being a good corporate citizen".

5
The range of Kellogg's CSR activities is long and includes: protecting the
environment, selling nutritious products and advocating healthy lifestyles. Acting
with integrity and adhering to the highest ethical standards, promoting diversity
in its work and partnering with various suppliers, just as to ensure a safe and
healthy workplace are just a couple of more codes the Kellogg company
follows. This shows that Kellogg strive their morals ever since it was founded,
and stood by their moral code of what they thought "Corporate Social
Responsibility" stands for (Mackay, 2009).
Fig. 1: Kellogg's Square Dealer
In the early 1990s the first CSR consultancies were established in Sweden.
These consultants were acknowledging social responsibility as a new field of
work: Convincing organizations of the potential benefits CSR brings along.

6
Fig. 2: Categories of Consultants Selling CSR Services
However, throughout the 1990s consultants, presenting the social responsibility
of business, addressed it under various labels: sustainability, corporate
citizenship, corporate philanthropy, business ethics and to some extent CSR
(den Hond / de Bakker / Neergaard 2007, pg 39). Because several labels were
abandoned at the beginning of the 21
st
century, consultants continued by solely
using the label CSR. Yet when asked to define CSR the consultants often took
pen and paper and drew intertwined circles, showing that they could not
verbally define what CSR exactly implies. The explanation was that the field of
CSR is still under construction and they themselves were in the learning
process.
Fig. 3: Visual Accounts of CSR and Coexisting Labels

7
The ,,Business & Finance" Magazine published an article presenting that EBS
Building Society defines CSR as anything it does as a business that has a
positive impact in the workplace, amongst its members or the wider community
(Business & Finance / 2009). The World Business Council for Sustainable
Development defined CSR as a continuing commitment in which ethical and
environmental aspects are integrated into their day to day economic business
activities (The Business Times Singapore / 2009).
The Social Economic Council of the Netherlands defines CSR as follows:
Corporate social responsibility incorporates two elements.
1. Sufficient focus by the enterprise on its contribution to the welfare of society
in the longer term
2. The relationship with its stakeholders and society at large
Four well renowned economic authors, Friedman, Elkington, Carroll and
Buchholtz all have different perceptions of what CSR really means. Friedman
(1962) sees CSR only as a tool to increase a company's profit and that all social
and environmental activities are something the government and communities
have to deal with. He also argues that otherwise, you are preaching pure
socialism.
For Elkington (1997), in his triple bottom line reporting, social responsibility is a
three-fold: to create economic, ecological, and social value. Carroll and
Buchholtz (2003) expanded this idea and argued that CSR is a four-fold:
economical, ethical, legal, and philanthropic responsibilities are to be taken
under consideration.
Many more examples could be listed here but you will not find one single
definition which would show that all companies, that integrated CSR in their
business activities, are in the same way conscientious companies because they
all tend to stress different aspects of CSR. So the question remains, is there
really one definition of corporate social responsibility?
The position from which the International Organization of Standardization (ISO)
is trying to work, since there is no explicit definition of the three letters and the

8
meaning what CSR stands for, is to rethink if the "C" in CSR should actually be
there. Other people have also challenged what the "C" refers to. Should CSR
also embrace NGOs and governments or is it all about corporate behavior? The
ISO believes that corporate social responsibility could then be renamed into
"organizational social responsibility". That is the reason why they believe the "C"
in CSR could be left out. They believe "SR applies to more than just private
companies. Corporate Social Responsibility, CSR, has been broadened to
include governmental agencies and other organizations that have a clear
interest in showing how they work." (ISO 2006a).
A set definition of the term corporate social responsibility does not exist. How a
major company in the United States defines CSR will not be interpreted the
same way as by a major company in Europe or Asia. Another problem, when
trying to define CSR, is that it is used interchangeably with the concept of
"corporate governance".
2.2 Company's Motivation for CSR
The range of reasons why companies should become interested in being
socially responsible is diverse. In the course of time companies should detach
themselves from seeing CSR only as a strategy which slows down profits and
that it is something the corporation itself should not have to get involved in
(Friedman, 1962). Instead CSR should be regarded as a chance to create a
better image for the corporation, promote social responsibility to society at large
and eventually raise revenues in the long run.
Companies have different reasons for developing and implementing corporate
social responsibility policy. Primarily the corporations will contribute to CSR if
they believe that CSR will pay off in the future. There are several ways in which
CSR can affect profitability.
First, it can improve the company's reputation in the consumer market and
environmental stewardship also creates a reputational advantage that enhances
marketing financial performance (Miles and Corvin, 2000). More empirical

9
studies that were carried out all together have shown how a good social
reputation can influence the buying decisions of consumers. Yet one has to
emphasize that with respect to the consumer stakeholder companies have a
social responsibility both for the product itself (quality, safety) and product
information (advertising, packaging, and warrantees). This is to achieve that the
consumers specifically know what they are buying, what they are investing in
and that they are doing something good ­ trying to make the world a better
place. A negative social reputation can ultimately have a damaging effect on a
product as a whole. In the year 2000 the private energy company BP, which
formally stood for "British Petroleum", changed the meaning behind its name. It
now stands for "Beyond Petroleum" in order to show that they are socially
active, e.g. initiating sporting events in Poland.
Second, a good CSR reputation will also most likely be rewarded by both
potential employees and the current workforce. Ethical commitment in an
organization results in a better climate under the workers, consequently more
trust in the company and stronger dedication from the employees which
eventually leads to higher profitability. The absenteeism of the employees and
employee misconduct will reduce, if the climate under the workforce is healthy.
A good ambiance between the employees and the company will result in
complete job satisfaction and higher productivity. The results of these two points
are that the degree of the organizations corporate identity will flourish thus
giving it a better reputation on the market in comparison to the competition.
Of course there also is a financial motive behind the implementation of a CSR ­
strategy in an organization. Milton Friedman stresses the financial aspects of
business. That the main focus should be satisfying the company's shareholders
and not social activities for communities and stakeholders in terms of social
activities (Friedman, 1962). Although almost every multinational organization
has taken a certain distance from such a claim, the necessity of the financial
motive still is to be taken under consideration. If a company wants to expand its
social responsibility, it has to have the necessary liquid assets to follow the
above mentioned goals, which eventually lead to long term positive effects on
their reputation and raise their returns.

10
2.3 Examples of CSR carried out
The following 2 examples clarify how corporate social responsibility can be
carried out. Since CSR also involves society at large, and in the CSR world
Non-Governmental-Organizations (NGOs) are considered to be synonymous
with civil society, the first example will cover the reasons why companies invest
in NGOs. This example will argue in general why this investment is the right
step to create and implement a CSR philosophy in an organization.
The second example goes more into details. McDonalds, mostly known for its
fast-food restaurants, is along with "The Bodyshop" one of the leading
organizations who implemented social responsibilities into their philosophy and
is known for their engagement in a spectrum most people don't even know
about. The range of initiatives, the spectrum of what McDonalds has created
over the last few decades is almost as hard to believe as they have their own
coffee shop label, named Mc Café.
2.3.1 Investing in NGOs
The trend of businesses investing in NGOs has developed drastically over the
last two decades. Global leaders ­ including various governmental institutions ­
have realized the importance of cooperating with companies for their
international development and recognition. Companies see an opportunity to
raise their credibility towards the public when wanting to be socially responsible
because of the fact people doubt that, for example numerous multinational
corporations (MNC) have included CSR into their day-to-day business activities.
Since it is commonly known that the core business of NGOs is to interact in
helping, preserving, and securing on a multi plane level, a corporation's
credibility is better assured when investing in NGOs rather than to just provide
money to certain charities from time to time. Seeing as NGOs have the
knowledge, training and dedication in their field of work and that the program of
a certain NGO is ever growing and persistent, it is promotional for a company to
financially support an NGO in the long run. But not just the financial aspect is of

11
importance and interest to the Non-Governmental-Organization, also the
company's managerial knowledge can be useful. For example when planning to
expand certain insurance to an NGO target group in another country. This is
why NGOs around the world tend to increase corporate partnerships with
businesses. This movement is of great importance to the social responsibility of
a company, because when investing long term in an NGO, their social
trustworthiness is secured. Secured because since telecommunication has
evolved with increasing speed, the activities of companies are more transparent
as "the whole world" can see in what manner and in what way a company is
socially responsible.
An article by Elkington and Ferrell presented the results of a research done on
NGO-corporate partnerships in the perspective of environmental issues. This
research was requested by BP, the third largest global energy company, ­
Beyond Petroleum ­ to find out what kind of NGO would fit to their core
business. BP wanted to show their environment that they are increasing their
social performance. This action was done to boost the recognition of the brand
"BP". A company by the name of "SustainAbility" was hired to execute this
research. The surveys they had carried out came to the result that 85% of the
reviewed NGOs found that both the company and the NGO would profit from a
partnership. (Elkington, Ferrell, 1998)
2.3.2 McDonald's CSR Activities
McDonald has one of the biggest frameworks when it comes to corporate social
responsibility. All of McDonald's CSR activities arise from their main field of
work: providing fast-food at reasonable prices, but not at any cost. The
foundation of their entire CSR movement begins with the philosophy
"responsible food for a sustainable future" (Skinner, 2008). Yet how is this
philosophy put into practice? McDonald decided to ensure their social behavior
by implementing a Board of Directors, who are responsible for keeping the
McDonald standards guaranteed to their stakeholders.

12
Fig. 4: McDonald's "Corporate Responsibility: Oversight and Coordination
One of the first initiatives of this board was to create a code of conduct for
suppliers, so that the company is insured that a supplier lives and works under
the compulsory McDonald code. Every new potential supplier has to read and
sign this code before the company takes their service under consideration.
Fig. 5: Acknowledgment of terms to be signed by potential suppliers

13
This Code of Conduct (CoC) for the suppliers is only one part of their CSR
ideology. The whole McDonald supply chain has 3 responsibilities, the "3 E's".
Ethical, environmental and economic responsibility has to be upheld.
Fig.: 6 McDonald's Sustainable Supply Chain Vision
McDonald cares just as much about the employees of their suppliers as of their
own. Suppliers are expected to support the fundamental rights of their
employees as well as of all other people. A generated team tracks and
assesses suppliers performance from time to time and provide support if
violations to the CoC should occur.
Another aspect of McDonald's supply chain is the assurance of humane animal
treatment. For this, McDonalds ordered an animal welfare expert who designed
a comprehensive audit program. This was created to support McDonald's
Animal Welfare Guidance Principles which were created to assure that the
animals were not abused, neglected or harmfully treated.
McDonald is working closely with its direct suppliers in order to cut down on
their water, energy, air, and waste impact on the environment by implementing
a self developed Environmental Scorecard. Furthermore, McDonald is helping
the environment by working with NGOs and industry partners on rainforest
protection efforts.
The companies' attention on the subject of obesity was awoken long before the
production of the movie "Super Size Me", a documentary on a person who only

14
nourishes himself on McDonald's products, in 2004. The increasing concern on
obesity from NGOs, governments and others was the beginning of McDonald's
initiatives to start communicating this issue on potential health-risks with their
customers. Nutrition information in easy to understand bar graphics
demonstrated on product packages was the first step taken.
Fig. 7: Nutrition-Facts on Product Packaging
McDonald became the largest restaurant retailer thanks to the community in
which they are operating. The way they are repaying the communities are in
diverse ways, from sponsoring and partnerships to the birth of the Ronald
McDonald House Charities (RMHC) (Skinner, 2008).
Established in the 1970s, the RMHC became the largest CSR initiative taken by
McDonald. It lives on donations given by McDonald's customers over the
internet or right into a restaurant's donations box. The three core programs of
the RMHC are the Ronald McDonald House, Ronald McDonald Family Room,
and Ronald McDonald Care Mobile.

Details

Seiten
Erscheinungsform
Originalausgabe
Jahr
2009
ISBN (eBook)
9783836642989
DOI
10.3239/9783836642989
Dateigröße
2.6 MB
Sprache
Englisch
Institution / Hochschule
Fachhochschule Bonn-Rhein-Sieg – Wirtschaft
Erscheinungsdatum
2010 (Februar)
Note
2,0
Schlagworte
benchmarking greenwashing stakeholder corporate philanthropy
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