Monday, March 11, 2013

Quantifying Corporate Social Responsibility

I recently had a conversation with someone about the benefits of corporate social responsibility. We talked about the popular companies associated with this noble feat in our capitalistic society. This "sacrifice" taken on by many organizations takes much more than a spirit of responsibility. There is a commitment beyond mere words and scheduled activities to connect with the world around them. The act of being socially responsible in a corporate setting means excess resources and organizational slack (Cyert and March, 1963) are abundant enough sustain this promise over an indefinite period of time.

I mention all of this to make a point that centers on how counter-culture the practice of committing to social responsibility is in a capitalistic setting. Ben & Jerry's Ice Cream is one of the more notable companies associated with making social responsibility a part of their brand, which has been successful beyond measure. However, I question the constraints present for publicly-traded corporations that hinder them from adopting strategies that include social responsibility as a part of the overall strategy. The pressure to produce great financial results every three months can often destroy any potential plan to dedicate resources to matters unrelated to production. Just to be clear, I recognize that many publicly-traded corporations are engaged in very meaningful efforts to improve the world around them, using resources generated by sales revenue. But many of these efforts are driven by legal and risk concerns that are mitigated by a good public relations strategy. What happens when excess resources and organizational slack disappear, and firms are forced to make hard choices?

A brief glance at the corporate world and marketing highlight the reality that consumer demand plays an important role in placing a value on social responsibility. While it cannot be quantified, corporate social responsibility has been a very necessary component of many brands. It's a reality that emphasizes how the public, private, and non-profit sphere are merging in many ways where the average citizen expects certain things from any service provider. For anyone interested in one of many perspectives on how the public interacts with these three spheres, check out Exit, Voice, and Loyalty by Albert Hirschman (1970).

I don't have a point today. As it relates to brands, I encourage everyone interested in building a brand to think of ways to incorporate social responsibility from a perspective unique to the ills of your environment. Sure, it's great to take on poverty, global warming, or homelessness as the public problem of choice. But improving the world around you is much more useful, and possibly much more beneficial to your brand. If you make a connection with the problems in your immediate area, you may find the benefits are so good you wouldn't dare suggest quantifying it.

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