Corporate social responsibility in life insurance advertising and ethics

Corporate Social Responsibility -- Internal as well as External CSR

Examine corporate social responsibility (CSR) from internal and external perspectives. Discuss the importance of CSR in advertising and critically examine some companies that may use CSR in a cynical context: for example, some companies are projecting the following attitude: Look at how ethical and community-minded we are, hence, you should buy our products because we really care more than our competitors.

Corporate Social Responsibility - Introduction

The idea of corporations becoming socially responsible and accountable to the communities in which they operate -- and to their stakeholders, including their customers -- is not a new concept. In fact, as Professor Craig Smith of the London Business School points out, the idea that businesses had "societal obligations" became "evident" back in the 19th century (Smith, 2003). In the aftermath of the Industrial Revolution British business leaders like George Cadbury (1879) and William Lever (1888) built modern factory towns so their workers wouldn't have to struggle to survive in slums (Smith, 1).

Professor Smith correctly points out that one of the drivers of CSR is the "criticism" that businesses have been receiving -- more "far-reaching than ever before" -- which is based in part on the "failure of governments" to solve social problems, and also in part on the public's uneasiness with globalization and the longer reach of corporate interests, which sometimes take on questionable ethical aspects (Smith, 6). Indeed, CSR is a powerful theme repeated constantly in today's globalized marketplace. In fact corporate social responsibility (CSR) has become a key part of many company's marketing programs because, as an article in the journal Business Ethics: A European Review points out, messages about strong ethical behavior and socially responsible actions "…are likely to evoke strong and often positive reactions among stakeholders" (Morsing, et al., 2006).

There certainly are "business benefits" to be reaped when companies boldly point out their good deeds, but those deeds and messages can also "…attract critical stakeholder attention," Morsing explains on page 323. In fact, that "critical" attention given to companies that present messages to the public about their ethics and support for social change is one of the key reasons for this paper. This paper makes a clear distinction between the "business case" for CSR and the "normative case" for CSR; the normative case would include having a corporation do what's right and what is ethical, while the business case refers to the helpful public image a corporation expects to receive from CSR, whether the CSR is sincere or not.

Corporate Social Responsibility -- Advertising

Life insurance companies in Taiwan are often engaged in advertising their CSR initiatives for several reasons. For one, being socially responsible is seen as "an ethical issue in Taiwan" (Hsu, 2012). For another, life insurance companies are importantly viewed as "respecting the benefits of stakeholders" and protecting policyholder's rights; and for a third reason, the life insurance industry is seen by citizens in Taiwan as "earning abnormal profits" (Hsu, 190). Hence, CSR is "especially important" to members of the public who have high expectations for wealthy companies -- especially those seen as very wealthy (Hsu, 190).

Corporate Social Responsibility also means using advertising to support groups that are otherwise being marginalized by government. An example is the 2014 Winter Olympics in Russia; a law was passed essentially banning gay relationships in public, and the outcry by not only gay and lesbian groups but by the United States, caused Olympic sponsors to use advertising to defend their interests. McDonald's, a corporate sponsor of the Olympics for 37 years, advertised that it believes "…sport is a human right and the Olympic Games should be open to all, free of discrimination, and that applies to spectators, media, and athletes" (Taylor, 2014). Since McDonald's is one of ten firms that pay $100 million each four-year cycle to be very visible at the Olympics, it was vital for the fast-food behemoth to take a stand through advertising.

Corporate Social Responsibility -- Internal / External Marketing -- Pro-Sports Teams

While most of the focus of the CSR-themed literature has been on corporations' CSR initiatives and the ramifications of those initiatives, in the Journal of Sport Management the authors point out that professional sporting organizations have entered into the CSR milieu "at a rapid pace" (Babiak, et al., 2009). The issues and strategies that motivate professional sports organizations to get involved in "socially responsible activities" are the same ones that motivate corporations, Babiak points out (720). From Nike and Reebok, to the NFL, the NBA, and NASCAR -- among a myriad of other sports entities -- the CSR implemented generally includes publically announced community outreach to youth organizations, professional players visiting hospitals and showing up at events designed to help underprivileged boys and girls -- and to community environmental issues as well.

These of course are external programs, and the authors suggest there are four factors that make the external CSR in sports different from the typical corporate CSR: one: "passion" (ticket-buying soccer fans have passion, Red Sox fans / consumers have passion, quite different from people who buy breakfast cereal or Tylenol); two: "economics" (many players make millions of dollars; the NFL is worth billions of dollars; sports teams have "special protections from the government" and hence the perception of arrogance can be balanced when sports teams and league engage in CSR); three: "transparency" (the outrageously high level of earnings is "open knowledge" in sports, unlike other industries, so sports teams "engage in CSR as insurance against negative reactions"; to wit, would the NFL have helped the Society for the Prevention of Cruelty to Animals (SPCA) if star quarterback Michael Vick had not been involved in dog fighting?; and four: "stakeholder management" (the media, fans, sponsors, levels of government, and communities, all benefit from CSR activities) Babiak, 722-23).

By conducting in-depth interviews with executives and PR people in four teams in a "Midwestern American city" (one each from the NFL, NHL, NBA and MLB) the authors determined that external CSR by sports entities cannot be sustained without being part of "the organization's core competencies" (734). In other words, without internal efforts towards CSR the external ones aren't effective in the long run. A team with "high external and internal orientations in its CSR efforts" is thus practicing "strategic-CSR" policies (Babiak, 735). An example of what the authors call a good "strategic-CSR" approach is the NBA's "Fit Kids, Healthy Future." Rather than giving money to charities or just having NBA stars show up at hospitals, this program involves coaches, players, the team's mascot, the team's corporate sponsors, and nonprofit partners to focus on community problems (like obesity, for example) (Babiak, 735).

Question TWO: Critically assess the future of advertising using smartphones.

When it comes to smartphones, there is little doubt that advertisers already have a ready-made source for their messages -- and that outlet is growing exponentially -- because there will be about 4.85 billion phones in the hands of consumers by 2015, according to authors Terence Shimp and J. Craig Andrews. At that time, if the predictions come through, about 67% of all people on the planet will have a mobile phone (Shimp, 2013, 366). The spending on the part of advertisers by the end of 2014 will approach $2.55 billion, according to Marcom Insight, referenced by Shimp (366).

Meanwhile, the first pertinent question from this kind of discussion is likely to be, will people be willing to have their iPhones and other smartphone devices bringing advertising messages to them, no matter where they are? A study conducted by the economics and business faculty at the University of Oulu in Finland takes on this issue from the consumer point-of-view and from the industry point-of-view. There are four factors, according to authors Leppaniemi and Karjaluoto (writing in the International Journal of Mobile Communications), that will reflect how willing consumers are to get mobile advertisements. Those four are: the role of "mobile medium in marketing mix"; the "development of technology"; "one-to-one marketing medium"; and the "regulatory" issues that apply to advertising on mobile phones (Leppaniemi, et al., 2005).

Of course this article was written in 2005, and many new apps and other technologies have been part of the mobile phone experience subsequent to that year. But the authors conducted valuable research thirteen years ago by interviewing 3,300 people in 11 "key global markets" (USA, Europe, Asia, and South America). Those participants (16-45 years of age) were very receptive to advertising on their mobile phones. In fact 88% were "receptive to m-advertising" -- which meant back then that the phone user would receive electronic coupons for "brick and mortar" stores (Leppaniemi, 199). The participants indicated that they would welcome advertising on mobile phones if: a) they were given a choice of what advertisers would send messages to their phones; b) if they could "bypass messages" easily' c) if they could filter, or customize the ads they receive; and d) if they received something in return for being willing to get ads on their mobile devices (Leppaniemi, 199).

Moving forward in time to 2012, the marketing practice that has been going on for many years -- coupons, which offer a discount to the consumer -- is now in full force digitally. (Note: to receive advertising on a mobile phone a user must have an "app.") In fact Nielson has personalized the mobile shopping app to the point that in 2011, $470 million worth of digital coupons were distributed, and $4.6 million of those coupons were "redeemed by the end consumer, with more than 80% of consumers using them regularly" (Cameron, 2012).

The consumer of course saves money through the coupons that come to his or her smartphone digitally; the retailer, meantime, having the customer come in with a digital coupon means an increased level of "customer engagement and loyalty," which can lead to additional shopping trips to that particular store (Cameron, 333). And for the manufacturer, having personalized coupons to connect with mobile shoppers helps promote products and enhance brand loyalty at the same time (Cameron, 334).

Mobile app and coupon marketing through smartphones helps the advertiser gain a better understanding as to where consumers shop, "how they shop, how mobile coupons have changed their coupon use," and how loyal these consumers are vis-a-vis certain brands and stores (Cameron, 335).

How willing are smartphone consumers to use quick response (QR) codes? One important point mentioned in the International Journal of Consumer Studies (Atkinson, 2013) is that an individual's level of "trust" is a very important component in a consumer's decision to rely on mobile advertising -- and in particular, QR codes. The author is not just talking about trusting the technology; rather, the trust must be place on the product and the brand. In fact, Atkinson writes (391) those consumers who are "less trusting of manufacturers to ensure product safety" and to protect "consumer safety," are more likely than not to use QR codes. Also, consumers that are more trusting of government's willingness to "regulate firms" and to protect consumers as far as public safety is concerned, are more likely to use QR codes "when shopping for sustainable goods" (Atkinson, 391).

The information that is located by using a QR code helps the consumer be sure that the government has enforced safety rules regarding the sustainable products, and the QR code data also helps the consumer that is choosing products for environmental or ethical or political purposes as well, Atkinson continues (391).

Meanwhile, some worthy mobile phone tips are offered by the commercial company, Mobile Phone An, and they include the following: a) have a decent website so mobile users can link quickly and effectively back to your site; b) "don't be afraid to hire experts" to build your mobile site and website; c) mobile platforms should drive users to your main site; all mobile marketing should be designed "to drive people back to your home base"; d) older, cranky technology will "turn away potential customers"; hence, use cutting edge sites and advertisements; e) distributing free apps is "super easy" but customizing the particular app needed to market products is vital (Mobile Phone An, 2013).

In conclusion, there is no doubt -- and the literature backs this up -- that the mobile phone, or smartphone, is in the hands of perhaps 70% of the world's population, and is an important part of daily life for people. Hence, it is worthwhile to study how the smartphone will impact advertisers and consumers. There are potential downsides of course to mobile advertising, including the possibility that smartphone users will be harassed with advertising messages they don't really want. Meanwhile, as to the first part of this paper, CSR is now an important part of internal and external marketing for many (if not most) corporations. This paper pointed out that while some CSR is done for strictly business (PR) purposes, there are good examples presented as to how a company can become even more potent vis-a-vis CSR by implementing those values in the workforce. Both topics are contemporarily important in an increasingly globalized market place.