6
Part A – Theoretical Framework
7
Chapter 1
1. Corporate Social Responsibility
“Responsibility is literally what it says – our ability to respond. It is a choice we make – whether to be attentive to our children’s needs, whether to be mindful of the plight of those less fortunate, whether to be considerate of the impact we have on the earth and others. To be responsible is to be proactive in the world, to be sensitive to the interconnections and to be willing to do something constructive, as a way of giving back”.
[Wayne Visser, The Age of Responsibility, 2011:4]
Over the years, the world economy has been subject to considerable and continuous changes. In this context, thanks to the introduction of laws and regulations by state and political organizations and to the voluntary adoption of socially responsible behaviors, more and more emphasis has been placed on the ethical responsibility as well as on corporate social commitment.
The evolution of the concept of Corporate Social Responsibility can thus be interpreted as the result of two forces: the first one is strictly related to the activities undertaken by some organizations and politicians to spread CSR practices, while the second one is a force that has been driven by the numerous academic researches and debates among scholars and experts. Before delving into these aspects it seems reasonable to start off with exploring the single meaning of the words “responsibility" and "social" and what is generally understood by CSR.
According to the Merriam-Webster dictionary the word "responsibility"
means “something that you should do because it is morally right, legally required, etc.” in other words it stands for a personal commitment to doing something and the full acceptance of all consequences, especially moral and legal ones.
8 The adjective "social", on the other hand, seems to refer to “something relating to human society, the interaction of the individual and the group, or the welfare of human beings as members of society” (Merriam-Webster dictionary).
Transferred to the economic field, the proxy label Corporate Social Responsibility is taken to stand for the “company's duty to account for its actions to the entire community” (Merriam-Webster dictionary). Obviously much more technically and detailed definitions have been provided by economists and scholars over the years and they will be presented below.
1.1. Definitions of CSR
One of the first preliminary definitions of CSR was provided by Bowen1 in 1953, who argued that “the obligations of businessmen are to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society”(Bowen, 1953:6).
Bowen emphasized the fact that a company’s performance should be assessed both in terms of economic performance, and in terms of the social consequences resulting from its activities. In particular he claimed that business decisions have a huge influence and affect societal life from different points of view.
This perspective, however, after generating sharp criticism among scholars, culminated in the skepticism manifested by Friedman who argued that "the business of business is business"(Friedman, 1996:58) meaning that the main social responsibility for a company is to generate profits and the resolution of social problems is something that should be handled by governments and is, under no circumstances, a company’s task.
At the beginning of the 21st century, and more specifically in June 2001, perspectives on this subject matter decisively shifted. As a matter of fact, in June 2001 the “Green Paper - Promoting a European framework to CSR" was published by the European Commission Directorate. This document aimed at
1 “Social Responsibility of the Businessman”, Harper &Brothers, New York, 1953
9 launching a wide debate and seeking views on corporate social responsibility at national, European and international level. It suggested the adoption of an approach based on close cooperation between businesses, stakeholders, NGOs, local authorities and the community. CSR was essentially outlined as a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. Quoting from the Green Paper, in fact, being socially responsible means “not only fulfilling legal expectations, but also going beyond compliance and investing “more” into human capital, the environment and the relations with stakeholders […] and Corporate social responsibility should not be seen as a substitute to regulation or legislation concerning social rights or environmental standards, including the development of new appropriate legislation” (Green Paper, 2001:8).
This paper embodied the main strategic objective which had been outlined in 2000 by the European Council in Lisbon: becoming the "most competitive and knowledge-based economy in the world, able to grow in a sustainable way, creating new and better jobs and fostering social cohesion”(European Council,2000:1). The Green Paper also proposed a framework to get a better understanding of the various elements that make up CSR: in particular according to this approach, CSR is made up of an internal and an external dimension.
The first dimension – the internal one – is linked to the company’s internal practices. Within the company, in fact, socially responsible practices primarily involve employees and relate to issues such as investing in human capital, health and safety, and managing change, while environmentally responsible practices relate mainly to the management of natural resources used in the production phase.
The second dimension – the external one- extends beyond the company’s geographical perimeter, that is to say beyond the doors of the company into the local community and involves a wide range of stakeholders in addition to employees and shareholders: business partners and suppliers, customers, public
10 authorities and NGOs representing local communities, as well as the environment.
The definition provided in the Green Paper summarizes the main features of CSR, namely:
- the close connection between the company's activities and the social and environmental repercussions;
- the voluntary nature of commitment;
- The tangible commitment of companies that extends beyond the mere legal obligations.
An important clarification must be given as regarding the relationship between CSR and isolated philanthropic actions. Philanthropic actions represent one of the many forms of corporate responsibility and, if isolated, they are virtually sterile actions; on the contrary philanthropy becomes a socially responsible approach if coupled with a series of initiatives related to CSR, and it can thus be seen as a first step towards the implementation of CSR in the social context. Perhaps a more suitable definition would see social responsibility as the company's tendency to increasingly meet the social and environmental expectations of its internal and external stakeholders, going beyond the legal obligations. It seems clear that, in order to positively affect relations with stakeholders, it is essential that the whole enterprise is "impregnated" with the idea of CSR and this can be achieved by internally manipulating the corporate culture. This new vision based on the "social responsibility" does not question the centrality of global market but the main economic activities based on the exploitation of the primary economic factors (capital and labor) as well as of natural resources.
Closely linked and often confused with the idea of CSR is the concept of
"corporate citizenship" (Mc Guire, 1963).
The Corporate Citizenship (CC) is a term that describes the role and the social and ethical responsibility of a company. The term was introduced by McGuire
11 which defined it as: “the interest in politics, in the welfare of the community, in education, in the “happiness” of its employees, and, in fact, in the whole social world about it. Therefore, business must act justly as a proper citizen should”
(McGuire, 1963:144).
Other scholars consider the Corporate Citizenship as the commitment of companies to community’s welfare and to the environment they operate in (Moon et al., 2005; Norman and Néron, 2008). This label is often used as a synonym for Corporate Social Responsibility (Matten et al., 2003; Zadek, 2001) despite the most recent approaches tend to enhance and to stress the role that each organization has in the protection and the inhibition of citizenship rights (Matten and Crane, 2005).
Last but not least, the label Sustainable Development has also been greatly used in literature. This label encountered wide academic circulation in the 80’s referring to a new way of thinking business, namely as an activity oriented to accumulating profit but also mindful of the social and environmental welfare of present and future generations. Sustainable development allows, therefore, to meet present needs without compromising the ability for future generations to do the same.
This principle is based on two key concepts:
1) The "necessity", which refers to the typical basic needs of poor countries, which must be given top priority;
2) The idea to set limits to the technological development and the exploitation of environmental resources.
1.2. Theories on CSR
An important contribution aimed at “mapping” the vast territory of the complex and controversial theories and approaches relating to CSR was offered by Garriga
12 and Melè in 2004. They pinpointed different theories on CSR and they classified them in four big groups.
The first, referred to as instrumental theories, has its most famous exponent in Friedman. According to this first group the company is a means to create wealth and its social activities are thought of as means to achieve economic results.
The second group, the so-called political theories, deals with the power that a company exerts on the society and its political obligations. This group can be further divided into three main sub-groups (corporate constitutionalism, integrative social contract, corporate citizenship) and it focuses on the role of business and their related rights and duties and on the responsible use of power in the context of the political and social arena.
The third one groups the integrative theories (issue management, public responsibility, stakeholder management, and corporate social performance). According to these theories business is heavily dependent on society and corporate management should take into account social demands and integrate them in such a way that the company operates in accordance with social values. The integrative theories are also known as the Stakeholder Approach of CSR, which represents a reaction to Friedman’s shareholder-oriented paradigm. Theories included here relate to the way in which the "company gains its legitimacy and prestige interacting with stakeholders and society, integrating the different needs in their business activities which are then carried out in accordance with these social values.
In other words this interpretation of CSR represents a radical change in the way modern enterprises think. The ability of a company to create sustainable wealth over time is influenced by the relationship with its stakeholders.
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It is also worth mentioning the group of the ethical theories which aim at
“focusing on the right thing to do to achieve a good society” and include the stakeholder normative theory, the sustainable development approach and the common good of society approach. In general those theories are built on the assumption that each company has an ethical responsibility towards the community and the society it operates in.
Obviously it is not within the scope of this work to provide a thorough description of all the different theories mentioned above, I will only briefly analyze the most relevant ones in order to show how the concept of CSR has evolved over time.
1.2.1 From the Shareholders Theory to the Stakeholders Approach The Shareholders Theory finds its main purpose in the orientation towards maximization of profit also known as shareholder value. Before the emergence of the first American public companies, in fact, which has marked a turning point compared to other traditional forms of business, the principle of the Shareholders Theory had been leading the entire economic world. In the traditional view of a company, the shareholder view, only the owners or shareholders of the company are important, and the company has a binding fiduciary duty to put their needs first, to increase value for them. As a matter of fact, the only burden of responsibility that companies carried back in the 20th Century was purely economic and the maximization of a shareholder’s interests was a key objective.
The situation has dramatically changed and doubts have been cast on Adam Smith’s liberal line of thought: the ultimate goal of business, in fact, is no longer the accumulation of wealth for oneself.
According to Edward R. Freeman, the founding father of the Stakeholder Theory, success in business must be strenuously sought after and the process of gaining profits should, by any means, also involve all the company’s potential stakeholders or at least those exerting the deepest and most influential power on
14 the company. Moreover, the goal of all economic activities, according to this theory, is no longer the mere accumulation of money but the interest of every single company employee or manager is at stake and must be safeguarded, even if this means imposing limitations on stakeholders’ rights.
The company must not only satisfy the interest of the shareholders but it also must develop a sense of social responsibility towards the company's employees, suppliers, consumers and the community in general and towards all those who, in one way or another, affect the company's management by causing risks, creating tensions and opportunities.
Ultimately this new approach tries to indiscriminately extend the concept of corporate social responsibility to all those companies that create value and to all types of companies, not only to the big corporations but to small and medium enterprises as well, regardless of their legal and juridical form and their profit or non-profit nature.
1.2.2. Carroll’s Pyramid of CSR
An extremely precious contribution to the clarification of the concept of CSR was offered by Archie B.Carroll who elaborated the famous “CSR Pyramid” (Carroll, 1991:42). He organized different corporate social responsibilities as a four- layered pyramid model and came up with this Pyramid whose layers were made by four different types of responsibilities - economical, legal, ethical and philanthropic responsibilities.
According to Carroll and Buchholtz (2003), the pyramid of responsibilities should be seen as a whole and the different parts should not be separated.
Economic responsibilities are the foundations upon which the entire pyramid stands and they figuratively represent the prerequisite for a company to be profitable, to minimize costs and maximize sales by making sensible strategic decisions.
15 The second layer contains the legal responsibilities and it is also required by society. In these responsibilities companies are expected to obey the law, because the law mirrors society and law is society’s codification of what is right or wrong. In the third layer Ethical responsibilities are to be found and they differ from the legal and economic ones in the fact that they are not required but expected by society. Asserting ethical leadership, avoiding questionable practices or operating above the minimum standard of law could be examples of this type of responsibilities. The philanthropic responsibilities stand at the top of the pyramid and are a prerequisite to be a good corporate citizen and to improve the quality of life for the society. Corporate contributions to support the community by providing programs or engagement in volunteerism can be example of philanthropic responsibilities and to some extent they are desired and expected by the society.
Figure 1 The pyramid of Corporate Social Responsibility (adapted from Carroll, 1991:42)
Carroll’s Pyramid of CSR is a brilliant example of a stakeholder model because it graphically represents how stakeholders can be affected by those different types of responsibilities. For instance, if a business is not profitable, economic responsibilities will directly affect employees and owners. Legal responsibilities, on the other hand are vital to the owners, but they are also necessary in the
16 relation with employees and consumer stakeholders. Ethical responsibilities impact on all stakeholders, but most frequently they engage consumers and employees. Finally the major effects of the Philanthropic responsibilities are on the community, but there is also impact on the employees since the company’s philanthropic performance influences the employees’ morale.
The undisputed value of Carroll's four- layered model, not surprisingly still cited in virtually every work on CSR, resides in its ability to perfectly render the multidimensional nature of CSR, giving space to the growing importance played, in the last decades, by its ethical and voluntary dimensions unlike the so- called traditional components (economic and legal) which are socially required or imposed. It seems reasonable to think that this is the reason why economic responsibilities were placed at the base of the pyramid whereas the philanthropic one at the top, to highlight the sense of unequivocal hierarchical order.
1.2.3. Strategic CSR
The debate concerning corporate social responsibility has always been characterized by an underlying problem, namely the apparent conflict between the economic objectives of the company and the attention paid to the social aspects.
Literature and managerial realities have shown the existence of two opposing visions. The first one gives a negative connotation to the CSR, arguing that it destroys a company’s economic value. The company, therefore, should not take up any social responsibility because it represents a hindrance to the achievement of its profitability targets.
“Taking up a social responsibility for an enterprise is an obstacle to the attainment of its goal of creating profits because it requires the implementation of activities that are expensive and therefore prices rise, causing a reduction in demand” (Chonko 1995:322).
The alternative interpretation, supported by numerous empirical researches focused on the link between CSR and financial performance, on the other hand,
17 supports the idea that a correct use of CSR could help obtaining substantial benefits and could lead to the creation of value for both the enterprise and the society. According to this point of view, companies cannot neglect their social responsibilities because they are considered a strategic tool that can bring benefits both to the company and the environment and at the same time can strengthen the company's competitive advantage.
To this purpose, the scholar Baron devised the model of the so-called
"profit-maximizing CSR". In 2001 he came up with the term Strategic CSR, arguing that one can speak of Strategic CSR when “the company, starting with an economic objective in mind, combines social benefits and product sales as in the case of cause-related marketing" (Baron,2001:12). The concept of CSR therefore lays on a profit-maximizing strategy that is perceived as socially responsible but whose main motivation is in fact purely economic. The author, in fact, identifies CSR as part of the corporate marketing strategy because of the strong connection existing between social benefits and the rise in product sales.
To be honest, Strategic CSR is no new concept. Burke and Logsdon back in 1996 claimed that CSR is strategic when “ it helps the company to achieve substantial benefits related to its field of business, in particular by supporting the core activities and helping fulfilling the objectives outlined in the company's mission”(Burke and Logsdon,1996:497).
Those scholars investigated the conditions that could have helped a company simultaneously satisfy its own and its stakeholder’s interests and so they came up with 5 fundamental strategic dimensions:
Centrality. It is a measure of how CSR policies are extremely important for the enterprise and how they are profoundly related to the corporate mission and its business objectives. This strategic dimension enables the company to evaluate the feedback to determine the coherence between CSR activities and business strategy.
Specificity. This dimension refers to the ability of a company to benefit from CSR policies and put those benefits to use.
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Pro-activity. It is the ability of a company to plan its CSR policies before new social, political and economic trends have emerged. This strategic dimension is largely dependent on the geographic context the company operates in.
Voluntarism is closely related to pro-activity and it indicates the ability of a company to make decisions on a discretionary basis with no external imposition.
Visibility refers to the level of exposure of the company’s business activities and the ability of the company to gain legitimization from its internal and external stakeholders.
Another important contribution in the theoretical framework of the Strategic CSR was presented by Lantos (2001). The author classified CSR according to its nature (required CSR vs. optional CSR) and its scope (favorable to the Stakeholders vs. favorable to the company) and listed three types of CSR: ethical, altruistic and strategic CSR (Lantos, 2001:15-38).
Ethical CSR is defined as “morally compulsory” and it is not the mere compliance of the company to its legal and economic obligations, it aims on the contrary at avoiding suffering negative consequences for the company and prevents or corrects potentially harmful actions.
Altruistic CSR. This form of social responsibility refers to the contributions made by the company to the community. The nature of these contributions may vary. In most cases they are humanitarian or philanthropic actions carried out by the company to solve problems or social deficiencies that were not caused by negative actions undertaken by the enterprise in the first place. However, altruistic CSR, even though very noble and virtuous, is not included in the essentially economic company’s objectives, and it is for this reason a particularly rare type of CSR.
Strategic CSR or “strategic philanthropy” is about making good actions which are thought to bear fruits both to the company and the community.
19 It has also been defined as “philanthropy aligned to economic objectives”
(Quester and Thompson, 2001:34) and it creates a win-win scenario in which both the enterprise and the stakeholders get different kinds of advantages.
1.2.4. Porter and Kramer’s Theory : Integrating business and society An innovative approach to the definition of CSR is provided by Michael Porter and Mark Kramer who have contributed to a further evolution of the concept of social responsibility.
These two scholars strongly criticize the dominant approach according to which business and social interests are separated and propose a “fundamentally new way to look at the relationship between business and society that does not treat corporate growth and social welfare as a zero-sum game”
(Hopkins,2007:252). They introduce a framework that individual companies can use to identify the social consequences of their actions; to discover opportunities to benefit society and themselves by strengthening the competitive context in which they operate; to determine which CSR initiatives they should address and to find the most effective ways of doing so.
Figure 2 A convergence of interests between society and business (Porter e Kramer, 2002:14)
Porter and Kramer move from the assumption that:
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“Successful corporations need a healthy society, which creates demand for business as more societal expectations are met. The best way to create sustainable development is improving human skills through education, training, skill and capacity development, creating standards in productive workforce, safe products and working conditions and enabling health care and equal opportunities. At the same time, a healthy society needs successful companies, which create jobs , wealth and innovation that improve standards of living and social conditions over time” (Porter & Kramer, 2006:84)
According to the authors, there is a large level of interdependence between business and society and both business decisions and social policies must follow the principle of shared value creation (generating economic value in a way that also produces value for society) which is exemplified in the value chain below.
Figure 3 “The value chain and competitive advantage” (adapted from Porter, 1985:37)
The value chain is an explicative tool that helps us understand how much economic and social value is generated at every stage of a company’s production phase. Every aspect of a company’s value chain comes in contact with society either in a positive or negative way. Porter's Value Chain focuses on systems,
21 and how inputs are changed into the outputs purchased by consumers. Using this viewpoint, Porter described a chain of activities common to all businesses, and he divided them into primary and support activities.
Primary activities relate directly to the physical creation, sale, maintenance and support of a product or service (inbound logistics, operation, outbound logistics, marketing sales and after sales service) whereas support activities (procurement, technology development, human resources and firm infrastructure) sustain the primary functions.
The fundamental idea which this chain entails is that companies draw economic , social and environmental resources from the system, those resources are used to generate value ( be it social, economic or environmental) that will be redistributed to the system and it will bring benefits to the community and other companies as well.
1.3. Discourse Analysis and CSR
After presenting the main CSR theories and definitions I will now focus on the description of the communicative nature of CSR and the use of discourse analysis tools for the investigation of CSR communication practices.
As already briefly mentioned in the previous paragraphs, the communications revolution, via the utilization of new technology has given rise to inventive, often pervasive forms of communication that have become staples of modern life for businesses and consumers alike. This revolution has also brought with it a realization that corporate communications activities are an integral and important concern for organizations and this is the main reason why they have also been object of investigations for many scholars who have drown on the instruments of Discourse Analysis to study CEO’s statements, social reports and other CSR communication practices.
Several studies, for instance, have analyzed social reports from a social constructionist perspective, based on the understanding of discourse as “a
22 practice not just of representing the world, but of signifying the world, constituting and constructing the world in meaning” (Fairclough, 1992: 64).
Laine (2005), as a matter of fact, employs discourse analysis to deconstruct the meaning of the expression ‘sustainable development’ in the social disclosures produced by a list of Finnish companies. The results of his analysis show how sustainability is constructed as compatible with economic growth and characterized as a ‘win–win’ solution to social and environmental problems that requires no major restructuring of the current economic paradigm.
In a recent study, Lischinsky (2010) employs corpus-based techniques to explore the business notion of sustainable development in a collection of reports issued by 50 large Swedish companies. By analyzing the collocational and prosodic profile of the key lemma sustain*, the author concludes that the business view of sustainability is frequently connected with profit and corporate prestige, and that market objectives and proclaimed intentions feature more prominently than reference to concrete actions.
Catenaccio (2011), on the other hand, employs discourse analysis and corpus linguistics to investigate how Novartis, a Switzerland-based healthcare company, by molding and shaping its online CSR communication manages to discursively construct and convey a positive self-representation of its own identity in the face of the fierce patent-related controversy concerning the cancer drug Glivec arisen in India in April 2014.
From those and other numerous studies the idea that the discourse of CSR has a reality- building function has emerged, as it plays a crucial role in justifying companies’ newly discovered social commitment in the face of a conventional exclusively profit-oriented view of business.
Following this line of thought, the theoretical underpinnings of my investigation will lie in a constructivist approach to language and discourse which sees discourse and social reality as mutually interdependent and, indeed, mutually constitutive (Chouliaraki/Fairclough, 1999). According to this view, in fact, discourse plays a major role in creating social constructions, as language is not a
23 mere medium which mirrors ‘reality’, but rather a powerful tool which shapes our view of the world, “providing us with a way of structuring our experience of the world and of ourselves” (Burr, 2003: 49).
That being said I will now move on to describing CSR communication and its main features and functions.
1.3.1. CSR Communication
Corporate Social Responsibility Communication is for modern organizations an activity with strategic importance, since it is able to exert a great influence on Stakeholders’ and general audience’s behaviors and opinions on their structures and social behaviors. This particular form of communication has acquired, over the years, an increasing importance, since it is by now clear to industry experts and operators that a well-planned, fair, transparent social communication is a great way to win the skepticism that stakeholders generally have towards the sustainable communication. According to Lewis (2003: 356) "the concept of social responsibility exerts a clear influence on corporate communication", as the latter is still a hot topic in the field of corporate social responsibility (CSR) of, the Corporate Citizenship (CC) and the Sustainable Development (SD).
Basically, "communication [...] is still the missing link in the practice of corporate responsibility" (Dawkins, 2004:109), because the majority of the companies while being engaged in fulfilling its social ethical responsibility fail to give visibility and, therefore, credibility to its social commitment (Lewis, 2003 : 361). Generally, we talk about CSR communication when a company is personally involved in giving visibility to its social commitment and when it is
"deeply influenced by managers and employees’ willingness to be identified with their work environment" (Morsing, 2006: 171), not only communicating but also engaging in conversation with its stakeholders.
This particular form of communication is considered by some scholars a sort of particular "nuance" that is able to strengthen the consumer’s loyalty and attachment to a product or even to a brand. This happens when the company
24 properly and transparently communicates the efforts made in terms of social, economic and environmental sustainability by directly involving their partners.
An effective CSR communication is also based on an equally effective strategic planning which is able to ensure that all messages conveyed are consistent with the corporate communication goals and the needs of its recipients.
CSR communication, in order to be effective cannot do without the following factors (Du et al., 2007: 224-241):
CSR Commitment : it is possible to support a social cause demonstrating its commitment in various ways: by donating funds, providing business resources including marketing and communications skills, human capital (e.g. employees) and research and development (R & D) skills.
CSR impact: it is possible to focus the attention on the impact that the company’s ethical and social commitment has on society and/or the benefits that the target has obtained or will obtain thanks to this commitment.
CSR motives: as shown by some studies, business motivation for socially responsible activities tends to greatly vary according to different situations and circumstances. Actually, in order to better communicate their CSR commitment companies should enhance the existing convergence between the social and commercial value of their activities.
CSR fit, which refers to the alignment of the company’s social and commercial goals. To better understand the concept it is possible to resort to very simple mental associations between the brand and the social cause such as the dimensions of the product (e.g. a company manufacturing herbal products decides to support the protection of rain forests) or affinity with specific segments (e.g. Avon commits to fighting breast cancer).
25 1.3.2 Corporate communication vs. CSR communication
Before moving on to describing the main features of CSR communication, a clarification of the differences existing between corporate communication and CSR communication is in order.
Corporate communication has been defined in the book “Principles of Corporate Communication” as "all the activities that contribute to the integrated management of all forms of communication (internal and external), that companies deploy to create a solid relationship with the stakeholders "(Van Riel, 1995:3).
The definitions of "corporate communication" in the literature are very numerous and differ on the account of the aspects and emphasized characteristics, as well as of the conceptual framework (Jackson, 1987; Gruning, 1993; Balmer and Gray, 1999; De Pelsmacker et al., 2001; Gotsi and Wilson, 2001; Sono, 2001;
Argenti and Forman, 2002; Invernizzi, 2004; Van Riel and Fombrun, 2007).
Objective of this form of communication is the improvement of the company’s perception and reputation by the general public thanks to the dissemination of information aimed at targeting both the specialists in the field and the general public.
Conversely, numerous academic researchers have been carried out on CSR communication, the results of which have focused on the potential benefits in terms of strengthening corporate reputation and business activities in general (Maignan et al., 1999). The relationships and the influences between this form of communication and the corporate communication is still a poorly investigated field of enquiry although it plays a key role in the company- stakeholders relationship and binds together internal and external stakeholders (Mitchell et al., 1997).
Corporate communication is thus not what a company truly "says” but rather
“how what the company says and how its identity, which is the sum of controlled and not controlled messages to its stakeholders, is perceived by the "outer world"(Cornelissen, 2000:119).
26 At a corporate level everything is communication, starting from the way a company handles environmental problems, to shareholder statements which help form and influence the opinions of the stakeholders (corporate reputation and corporate image). The resulting idea is that, if everything is communication, even the company’s social-ethical commitment is directly or indirectly object of corporate communication, as the company can deliberately choose to promote the ethical dimension of its activities or either make sure that the stakeholders acquire information about it on their own by decoding the messages the company has disseminated both at the corporate and the marketing level.
1.3.3. The main features of CSR communication
CSR communication is a very important element for companies since, by correctly managing the relations with the stakeholders, it helps gaining strategically significant benefits. In order for this to happen it is crucial that the following are clearly and correctly defined: the contents of the messages, the channels on which the communication should take place, the objective pursued and the factors that influence the “effectiveness of the communication process”
(Du et al., 2010: 9).
Communication is a very controversial aspect of corporate social responsibility because on the one hand companies wish to keep their stakeholders informed on their social commitment but on the other they tend to show reticence in giving visibility and in communicating the actions they have taken for fear that they will fail to meet social expectations and will thus be harshly criticized.
The success of socially responsible communication is based, generally, on three main factors (Schlegelmilch and Pollach, 2005: 275):
1. The source credibility (sender);
2. The fairness of the statements (message);
3. The involvement of the public (receiver).
27 There is, also, a series of actions that can further contribute to the success of this type of communication and these include: awards and prizes, the publications on the contributions offered to the NGOs, a thorough media coverage and the stakeholder involvement in CSR actions (Hirschland, 2006:24-29).
Some scholars have identified a framework to study communication flows and the variables that affect the processes that underpin CSR communication (Morsing and Schultz, 2006; Du et al., 2010). Those processes are:
1) CSR Communication, which is based on the message content (commitment, fit, impact), as well as on the channels used at a corporate level (reports, company websites, PR, promotion, retail outlets), and on the so-called independent channels.
2) Contingent factors that are based on the stakeholders’ characteristics and on the company’s reputation, activities and strategies.
3) Results of communication activities, based on internal results (awareness, attributions, confidence) and external results (purchases, loyalty, support), on the Employees (productivity, loyalty, behaviors related to corporate citizenship, Support) and investors (investment, loyalty).
1.3.3.1. Objectives of CSR Communication
Like any other business activity CSR communication has specific targets in mind, which have to be coherent with the emerging social issues and primarily with all the stakeholders’ needs and expectations (Birth et al.,2008:185).
CSR communication covers very large field of action (Esrock and Leichty, 1998; European Commission, 2000 b; Holme and Watts, 2000) including the corporate mission and vision, corporate values, the business climate, social dialogue, respect for human rights, community involvement, the development of local economies, environmental issues and market relations (Birth et al., 2008:185).
In literature it has been recently tried to analyze the objectives of CSR communication on the basis of their degree of fitting the needs of various groups
28 of stakeholders who interact with the company and in particular the needs of customers, employees and shareholders.
According to this viewpoint customer-oriented CSR communication features three specific objectives:
1) Strengthening of corporate reputation, because a good reputation influences consumer satisfaction and the opinion they have of company products /services and, therefore, their purchasing decisions (McWilliams and Siegel, 2001;
Dawkins and Lewis, 2003).
2) Product differentiation, which allows a company to sell a better-designed product than its competitor one, at a fraction of the cost and complying with the social and ethical principles (APCO, 2004).
3) Customer loyalty, which bases its customer relationships on values of
transparency, respect, effort and attention to social aspects (Jacob and Kyner, 1973; Keller, 1993).
Employee-oriented CSR communication is characterized, on the other hand, by the following objectives:
1) Strengthening the corporate reputation by word of mouth, which is possible because employees represent a particularly powerful channel for transmitting positive messages and information about the company (Dawkins and Lewis, 2003).
2) Increasing employees’ level of satisfaction and commitment, only possible if there is a direct link between employee loyalty and social responsibility (Bevan and Willmott, 2002).
3) Fostering business growth so that potential employees will be attracted by the ethical integrity and responsibility demonstrated by the company (Joyner and Payne, 2002; Keeler, 2003; Bevan et al., 2004).
4) Reducing the employee’s turnover, because those who act on behalf of a socially responsible organization not only tend to share its values and its conduct (Maignan et al., 1999) but also they tend to keep those values at heart. (Bevan and Willmott, 2002).
29 1.3.3.2. Channels and Mediums
Like any other type of communication, CSR communication also makes use of different channels in order to give voice to a company’s social commitment and whose choice cannot be separated from the characteristics, the attitudes and the needs of the targeted audience.
Companies, in fact, can communicate their social commitment either through institutional channels (e.g. annual report CSR, press releases, and corporate websites) and traditional media (e.g. radio and television commercials, advertisements, newspapers and magazines etc.) or resorting to the so-called new media (e.g. Social media). The most frequently used CSR means of communication range from annual reports (Cerin, 2002) to non-financial reports(Hooghiemstra, 2000; Haddock-Fraser and Fraser, 2008) and even to institutional web pages, blogs and social networks (Coupland, 2005).
As part of the CSR communication the motivations that drive organizations to prefer one channel over another have been recently investigated by the European Commission (2001 a, b), that, with two different researches, has shown that the most frequently used channels are company reports, websites and advertising, while the most used mediums are sustainability reports, ethical codes of conduct, web sites, online and offline communication with stakeholders, internal channels, social networks, blogs, events, packaging, and so on.
In particular, sustainability reports continue to be the most preferred medium used for CSR communication purposes, because they highlight “the social and environmental impact played by typical companies’ economic activities on particular stakeholders and the entire community "(Gray et al., 1996:135).
It is clear, therefore, that CSR communication has a multiplicity of channels at its disposal, whose strategic role is influenced by the degree of control that companies exert on them. Currently, the company's influence on this form of communication is somewhat limited, because with the emerging of the Web 2.0 and the spread of social media, the number of people authorized to producing and disseminating information on the web is potentially very large. The web thus
30 plays a decisively prominent role in the CSR communication because it is a channel that influences the business agenda (Esrock and Leichty, 1998; Ku et al., 2003) and the ability to spread an increasing amount of information at low cost and much faster than it used to be in the past.
1.3.3.3. Recipients
CSR communication is characterized by a very large number of potential recipients, ranging from customers, employees, investors, NGOs and local communities (Dawkins, 2004:109). Each and every mentioned category displays different expectations and information needs as well as they tend to respond in an equally different ways to social and ethical messages provided by the companies.
CSR communication is, therefore, mainly directed to stakeholders, i.e. “to individuals or groups with relevant interests in a company and who can significantly impact on its activities” (Freeman et al., 2002:43).
In the literature, stakeholders, as the main target of the communication of CSR, have been divided into: opinion leaders (e.g. business press, investors and NGOs) and general audience (e.g. consumers and local communities) (Dawkins, 2004:110). Opinion leaders have a proactive attitude towards CSR communication, which manifests itself in the careful search for information and in the consultation and assessment of institutional sources (e.g. CSR report). The aim of these individuals is to get a full picture of the social and ethical commitment of a particular organization. There is, however, a particular type of opinion leaders, the so-called "traditional investors”, whose main interests are limited to getting insight on economic and financial issues, sustainable finance and, above all, to maximizing shareholder value.
Another very interesting group is represented by the so-called "CSR activists", interacting with companies and organizations to discuss of the decisions made concerning specific social issues. (Dawkins, 2004:112).
Conversely, however, the general public does not demonstrate a particularly proactive stance towards CSR, even when particularly relevant issues are at stake
31 (Dawkins, 2004:118). This group of stakeholders, in fact, tends to acquire information mainly through traditional media (TV, press, etc...), through word of mouth, online researches, blogs, forums and social networks.
1.3.3.4. Messages
As defined by the theory of communication, the message is what, encoded from the source (sender), "passing" through the selected channel, is then transformed into a meaningful act of speech when received and decoded by the recipient or receiver (Shannon, 1948; Weaver and Shannon, 1963). The message is, therefore, the object "exchanged" in a communicative act and represents the information produced and transmitted according to codified rules and that only makes sense for those who are specifically involved in the act of communication (Jakobson, 1966; Sebeok, 1998).
As far as the CSR communication is concerned, the message is what leads to a cause and to social activities of a company and that the recipients choose to support if appropriately involved and informed on (Bhattacharya and Sen, 2004:
10). The effectiveness of CSR communication lies in the support shown to the targeted social cause, to the real reasons that determined it and, above all, on the link between cause and business activities (Bhattacharya and Sen 2004:15).
CSR communication can be more effective if the company manages to correctly highlight the social value of communication and to convey the true motivation that drives stakeholders to take part in the communication process (Van Lange et al., 1997:735).
As a matter of fact, the message of CSR Communication can take up three main functions: pro-social, individualistic and competitive (McClintock and Allison, 1989; Van Vugt et al., 1995; Dawkins, 2004; Cone, 2008).
In the first case (pro-social function), the goal is to maximize results for the company, the stakeholders and the community, minimizing any existing gap between them. In the second case, (individualistic function) the message sent by the companies has the aim of maximizing the company’s economic performance
32 ignoring the stakeholders and the community interests. In virtue of the third function (competitive function) companies are exclusively geared to achieve their economic objectives and to obtaining a competitive advantage over the counterpart.
Researchers have demonstrated that the more it is made explicit in the CSR message that a social problem is being dealt with, the more the audience will be suspicious of a company’s hidden agenda. This is due to the fact that this form of communication does not seem to match the traditional communication patterns and companies are therefore warmly invited, in order for a smooth and unsuspicious communication to take place, to emphasize the importance of the social issue at stake and reassure the recipients of the CSR communication message that no personal benefit will be claimed by the company. (Menon and Kahn 2003:320).
33 1.3.4. The Web 2.0, social networks and online/offline CSR communication The current communicative context has prompted companies to promote their commercial and non-commercial initiatives using not only the traditional channels of communication but also those typical instruments of the Web 2.0, among which the social networks stand out to be the most suitable ones for a more equitable and democratic communication between the stakeholders and the company.
Successful platforms such as Facebook, MySpace or Twitter (Lipsman, 2007; Pempek et al., 2009; Kang and Lee, 2010; Lin and Lu, 2011) in fact have fostered the diffusion of new forms of communication based on multimedia technologies that facilitate interaction between the parties (users users and users- company) and at the same time are able to guide the public opinion and assert its socio-economic influence (Kane et al., 2009; Pfeil et al., 2009; Ross et al., 2009).
The academic literature offers on this matter a still limited number of research-oriented analyses of the role and the influence that social media have on traditional media, institutions, NGOs (Non Governmental Organizations) and citizens. This state of affairs is, in part, due to the changes occurred in the so- called "information ecology" and that is, in the methodologies and the production and publication of online content techniques.
Although CSR communication is not yet extensively studied (Copulando, 2005; Branco and Rodríguez, 2006), some analyses purport that the Internet is one of the most widely used channel for business communication due to the very fast pace at which information is distributed and the accessibility as well as the ability to interact with a much wider audience through a specific feedback system (Esrock and Leichty, 1998:307). Online communication in fact allows organizations to disclose, in a very short time and at a derisory cost, information deemed more transferable than those coming from institutional sources (Dawkins, 2004: 110).
In the context of CSR communication, the diffusion of Web.2.0 platforms and social media resulted in an exponential growth of stakeholder’s power, who
34 are nowadays not only able to influence the companies’ business agendas but also CSR communication strategies. These phenomena have led organizations to an increasing use of social media, which, compared to traditional media, ensure both the simplification of the processes of creation and dissemination of information and the development of advanced forms of multi-stakeholder interaction (Wanderley et al., 2008:372).
One of the major benefits offered to companies by online CSR communication, in fact, is the implementation of a continuous and interactive flow of information (Multidirectional) which replaces or supports the one triggered by traditional mass media (and Esrock Leichty, 1998; Bondy et al., 2004; Vural et al., 2009). As a matter of fact, multimedia and social platforms allow stakeholders to disseminate, disprove or support the information spread from institutional sources.
Recent studies have showed that companies belonging to different industrial sectors use equally different channels to communicate their social commitment (Sweeney and Coughan,2008), including: sustainability reports, advertising campaigns, billboards, web sites, blogs and social networks. The latter are not only very common, but also contribute to ensure a higher rate of pro-activity and transparency to social communication (Chaudhri and Wang, 2007:240).
The current on-line communication of CSR is primarily based on corporate websites and social media always offering the latest information and the opportunity to directly and quickly interact with different stakeholder groups.
Unlike traditional media, the network guarantees more democracy and transparency to the stakeholder – company communication process (Chaudhri and Wang, 2007:242), making the information easily retrievable as well as subject to possible change by the different corporate stakeholders.
This situation, therefore, encourages an open and direct comparison between the "institutional" (company) and “informal" (stakeholders) point of
35 view, even if the information and the resources available online are not always considered 100% truthful and reliable.
This happens despite customers, NGOs, consumer groups and common citizens take a proactive approach to Corporate Social Responsibility and independently try to verify the reliability of the information provided and the real social commitment, by consulting information sources or browsing through the many dedicated sites, blogs and social networks.
What it seems to be missing to the "mare magnum" of online communication is then, reliability, truthfulness and credibility of the information (Pollach, 2003:12), which is made even more unreliable from the very actors taking part in the communication act such as NGOs, governments and research institutions.
Deciding to communicate online it’s an instance of social commitment and it implies that the companies are constantly present on the web in order to stay updated on the latest news circulating on themselves and their competitors.
Consequently it is possible to defend the company's reputation and avoid word- of- mouth to cause crisis in public relations or even negatively to affect the company's reputation.
"When analyzing the online CSR communication […] it’s obvious that will place emphasis on the community involvement and on products’ information" (Branco and Rodriguez, 2006: 235). Many studies have compared and analyzed the communication potential of different tools used in the CSR communication (the most flexible of which were websites and social media respectively, because less tied to the time variable and more interactive in nature than traditional reports (Pollach, 2003; Hunter and Bansal, 2007).
36 Online CSR
Corporate website Newsletter
Blog FAQ
Social network Wiki
Offline CSR Annual report Sustainability report Code of conduct Ethical code House organ
Internal manuals and guidelines
Table 1 The main instruments of online and offline CSR communication. (My elaboration)
This peculiar features of the Web 2.0 encouraged CSR communication to open up to those innovative communicative channels, as early as 1998, when more than 80% of the companies surveyed by Fortune 5002 were already practicing online CSR (Esrock and Leichty, 1998:319).
2 The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks 500 of the largest U.S. corporations by total revenue for their respective fiscal years. The list includes public companies, along with privatelyheld companies for which revenues are publiclyavailable.
