Marketing and HR vs Corporate Social Responsibility

Corporate Social Responsibility

The author of this report has been asked to do a critical review of the subject that has come to be known as corporate social responsibility, or CSR for short. Rather than just doing a general literature review of the subject, there will be some specific points of analysis that will be focused on. The primary focal point that will be distinctive in this report is the comparison and contrasting between the marketing and human resources departments when it comes to corporate social responsibility practices and corporate social responsibility initiatives. The reason for this compare and contrast is to critically evaluate whether corporate social responsibility can be used as a marketing tool or not or whether it is typically a net drain on the bottom line. The discussion of this subject will include all sorts of academic faire including academic theories, academic models, research and case studies. While it does take some adjustment and positioning to adhere to the agreed upon tenets of corporate social responsibility, it is absolutely possible to do so and it can be a marketing and sales boon to businesses when they are able to attract and retain likeminded customers.

Analysis

Corporate social responsibility has indeed become a major focal point and lens through which many business practices are assessed and critiqued. However, the topic of corporate social responsibility is actually eclipsed and very much preceded by a wider discussion about the role of business, they are supposed to accomplish and what is ethical for them to do. This wider paradigm is best typified by the arguments and debates between Milton Friedman and his detractors about the role of business and what should be the guiding light when it comes to what decisions are made regarding the business, what should guide those decisions and so forth. Friedman held that the one and only priority of running a business well was creating as much profit and shareholder value as possible while remaining within the constructs and limitations of the law. Of course, many of the rules and guidelines regarding what is now known as corporate social responsibility are less about the law and more about what is the ethical thing to do. To use an extreme example, a gas station heavily raising the price of gasoline per gallon when a hurricane is approaching could be done to maximize revenues and profits. However, even in jurisdictions where gas price "gouging," however it is defined, is legal, it is looked at extremely dimly because it is seen as taking advantage of an emergency situation where demand is artificially high. Since lives are at risk and the market conditions are not normal, many to most would say that such gouging is unethical and should not be permissible. To be fair, most corporate social responsibility examples and questions are not nearly that black and white. A more moderate example would be whether or not a drug company should offer low-cost or free doses of their drug to those that cannot afford it. They are not legally required to do so but healthcare is most certainly one of those fields where not being at least somewhat charitable and generous can be a political and reputational liability. It would indeed be a drag on the bottom line but many hold that such charity is simply the right thing to do and the fact that it is involves quality of life and even life/death makes this even more true (Nguyen & Boubaker 2014).

With the above in mind, the corporate social responsibility paradigm could and should be looked at in terms of the different job functions and departments within a business and how they perceive, react to and otherwise fit in with the corporate social responsibility. Even when there are clear strategic management objectives in regards to corporate social responsibility, one has to admit that human resources and marketing can indeed be at odds when it comes to the employing of corporate social responsibility as a business and marketing tactic. Of course, the general task and responsibility of human resources personnel is to hire, fire and otherwise administer the affairs of employees who are with the firm. Depending on the business, the human resources department might or might not have a real "seat of power" when it comes to a business and its objectives. However, this is usually the case and it is especially true when speaking of a firm that takes corporate social responsibility seriously. Concurrent to that is the work and efforts of marketing personnel. Their general task is to market and sell the goods or services that are offered by a given firm and in a way that maximizes businesses, maximizes retention and maximizes revenue (Chernev & Blair 2015).

Both human resources and marketing are alike in the sense that corporate social responsibility may seem like something to do for appearances rather than something that really does boost (or retain) customer count and/or that helps the bottom line. While that may have been true before corporate social responsibility became as ubiquitous as it is now, many things have changed over the years. However, what cannot be allowed to happen is for the two departments (or any other important functional areas in a firm) to act disparately and differently when it comes to a major strategic initiative like corporate social responsibility. Indeed, the actions, deeds, procedures and priorities of both departments need to be aligned with the strategic objectives of the wider firm and those objectives need to be strongly linked and correlated to the precepts and lessons of corporate social responsibility. For example, a firm that is serious about corporate social responsibility would hire people to lead or at least align with the corporate social responsibility frameworks that the business employees and, concurrent to that, the marketing department would trumpet the corporate social responsibility progress and values that the firm emulates an exhibits. It has to be both at the same time because if there is any proven (or even perceived) incongruence between the stated values of a firm and the underlying values of the same, there are many corporate social responsibility advocates and proponents that will assail the firm being targeted for being disingenuous and dishonest (Johnson & Holub 2003).

Beyond that, however, there is the general question as to whether marketing with corporate social responsibility being a major theme is effective or not. The research and study on the subject is far from monolithic but the general consensus is that it is a net gain rather than something simply done for appearances and that is actually a net drag. Obviously, there are some parts of doing business that are just that way such as compliance, public relations and so forth. These activities are not directly tied to the revenue stream but they must be done for legal and/or reputational reasons. When it comes to reputation, corporate social responsibility is certainly part of that aspect of doing business. However, we have to come back to the question of whether marketing and otherwise operating under a paradigm of corporate social responsibility is a net gain in terms of client retention, revenues and firm performance (Jeffers, Lin, Romero & DeGaetano 2014).

To answer this question, we should turn to the scholarly literature that is specially about that subject. One source on the subject asserts that corporate social responsibility and shareholder wealth are inextricably linked. The source admits that there is a wide-ranging and disparate debate about whether corporate social responsibility is worth the proverbial trouble when it comes to the consequences for firm shareholders. However, the study asserts that "marketing capability plays a complementary role in the CSR/shareholder wealth relationship," rather than an adversarial one (Mishra & Modi 2016). TO support this, an analysis was done of nearly two thousand firms over a decade-long period. The study concedes that corporate social responsibility efforts do not have noticeable effects on stock returns in general terms. However, this all changes when there are marketing capabilities and efforts that coincide with corporate social responsibility efforts within the firms. One key thing to do is to use marketing to speak on corporate social responsibility efforts that are verifiable and provable such as the use of clean energy, helping out the economically disadvantaged, hiring of diversity candidates, corporate governance frameworks being used and the supporting of employee unions. There seems to be no significant interaction effect when speaking about charitable giving (Mishra & Modi 2016).

To state the obvious, an obvious factor in whether corporate social responsibility marketing efforts can or will be successful depends a lot on the corporate social responsibility awareness and actions of the buyers of products and services. Indeed, if people are not impressed or reactionary to the corporate social responsibility efforts of businesses, then marketing to the same is not going to have a demonstrable effect since marketing is all about appealing to certain demographics and customer types. Indeed, if corporate social responsibility is the proverbial yin of this paradigm, then the buyer social responsibility (BSR) is the yang. Many efforts have been made to conceptualize and consider the former but not nearly as much work has been done as it pertains other buyer end of the equation. This is less than wise overall because it is important to consider and quantify the considerations of consumers when it comes to the social issues and how they influence purchasing decisions, the potential consequences of said purchases and the boundary conditions involved. There are those that assert that corporate social responsibility-driven companies need to create the shift for buyers and that both governments and non-governmental organizations alike can "strengthen BSR and draw on it to relieve social issues and create profitable market offerings" (Ingenbleek, Meulenberg & Van Trijp 2015).

With the above being said, the perceived or verifiable harm done to society and the environment as the result of less scrupulous marketers is rather easy to see. Smith, Palazzo and Bhattcharya (2010) noted that "the recent development of dramatically expanded global supply chains has resulted in social and environmental problems upstream that are attributable at least in part to downstream marketers and consumers" (Smith, Palazzo & Bhattcharya 2010). However, the same source also notes that corporate social responsibility advocates have responded to this salvo and bad acting by using corporate social responsibility communication as the linchpin of what they say themselves. Even so, there has been some backlash and blowback in reaction to some of this due to lack of credibility and this can result in damage to brand image and standing. In short, not all consumers and businesses are on board with corporate social responsibility and are more concerned with other things such as getting their items sooner, cheaper or otherwise in a way that is not good when it comes to corporate social responsibility. As a result, it is clear that the prior-mentioned education and persuading of both corporations and consumers alike to demand and embrace corporate social responsibility-driven business and commerce in general still has some ways to go (Smith, Palazzo & Bhattcharya 2010).

Of course, human resources can and should play an integral part of implementing and sustaining corporate social responsibility practices and initiatives. That is easy enough to say but some hold that "formulating and translating corporate social responsibility (CSR) strategy into actual managerial practices and outcomes values remain ongoing challenges for many organizations (Jamali, El Dirani & Harwood 2015). However, there is also the prevalent argument that human resources management (HRM) could provide for an interesting and/or dynamic level of support to a general corporate social responsibility practice in a firm. Further, there are many existing conceptual frameworks and models that provide for an interfacing between corporate social responsibility and human resources management. These models account for the potential human resource management roles in corporate social responsibility and there has also been the identification of a wide range of outcome values that result from a more effective integration of the role of human resources management within the wider corporate social responsibility paradigm. In other words, human resource management can support a progressive and systematic framework of corporate social responsibility efforts if done properly and if it is parlayed under the right agenda and organizational strategic objectives (Jamali, El Dirani & Harwood 2015).