Communicating CSR is More Challenging than Paying CSR

Communicating CSR is More Challenging than Paying CSR Supriya Motwani Institute of Management Studies, Bundelkhand University, Jhansi-284128, (U.P.), India E-mail : starwithsupriya@yahoo.com Abstract - In spite of the research on CSR being 50 years old, there is still no common definition of CSR. This field of study is not only theoretical & conceptually poor, but is also empirically unexplored. This is also true for CSR communication. CSR activities need to communicate because they may influence opinion leader s behavior regarding a target organization. This potential for exploring CSR communication has lead us to develop a study that focuses on CSR communication practice & it s challenges. Communicating CSR means not only communicating a company s behavior through standards or codes of conduct, but also communicating about very long projects. From this argument, we draw the conclusion that conscious communication of CSR is difficult, but necessary. Since creating stakeholder awareness & managing stakeholder attributes are key prerequisite for reaping the strategic benefits of any business initiative, it is imperative for board members & senior executives instituting a CSR program to have deeper understanding of key issues related to CSR communication. These include questions surrounding what to communicate, where to communicate, as well as an understanding of the factors that influence the effectiveness of a CSR campaign. Communicating CSR is a very delicate matter, & a key challenge of CSR communication is how to minimize stakeholder skepticism & to convey intrinsic motives in a company s CSR activities. This paper explores the various communication channels for CSR, their communication objectives, & challenges posed by the companies for communicating CSR. I. INTRODUCTION The idea of CSR is very old, and it has successfully implemented in many of the companies at the world level and in India too. Some of the major drivers of CSR in India have been Tata, Birla, SAIL, ONGC, NTPC, BPCL, and WIPRO. What are these companies does under CSR? They simply return to the stakeholders, what they are receiving. Nowadays it is becoming more and more important for companies to communicate their CSR. Thus, the basic purpose of the paper is to verify the issues in CSR communication & identify the challenges faced by it. Global communication creates a context where public opinion does not trust organizations that overstate their social behavior. CSR communication is therefore becoming increasingly important. II. OBJECTIVES Theoretically, poor & empirically less explored area attract us to lead the research. In spite of growing IT revolution, CSR communication did not get substance in recent past. To understand every stakeholders perception toward CSR communication. Aware organizations to reap the benefits through sound CSR communication strategy. Identify challenges posed by companies regarding CSR communication. III. LITERATURE REVIEW 3.1 Issues and channels in CSR communication The communication of CSR issues is reported without consideration of how they are communicated. Issues as mission, vision and values, workplace climate, social dialogue, human rights, community involvement, development of the local economy, environment, market relations, and ethics must be communicate to make CSR an effective activity. Looking at recent studies, three channels particularly have been investigated and discussed: i). Social reports are the main channel for communicating CSR, The social and environmental effect of organizations economic actions to particular interest groups within society and to society at large (Gray et al., 1996). Stakeholders often accused 41

companies of writing arbitrary reports. To avoid this, the adoption of international reporting standards and thirdparty certification is helpful. ii). CSR communication via web is the second channel considered in CSR communication. According to the results obtained by recent studies, even though the exact relationship between websites agendas and the public agenda has not yet been discovered, there is strong evidence of the fact that they converge (Ku, Kaid and Pfau; 2003). Using corporate websites to influence public opinion on issues has great potential that few companies seem to have understood in the past (Esrock and Leichty, 1998). iii). Advertising; in fact campaigns containing social elements have been abundantly used in the last decades, but the evaluation of their success has been quite controversial. The public for the social dimension itself often criticizes these campaigns Apart from these three channels, empirical surveys investigate other channels as -thematic reports, codes of conduct, stakeholder consultation, internal communication, prizes and events, cause-related marketing, communication on product packaging, interventions in the press and on TV, communication at points of sale. 3.2. CSR Communication objectives with regard to Strategic stakeholders To have conscious CSR communication, it is necessary to define clear communication objectives for each stakeholder. Three specific types of stakeholder are clients, employees, and shareholders. i). Communication objectives with regard to clients depend on the industry and typology of product. Such objectives may help the organization to respond to a client s request for information. A first objective can be to improve reputation through CSR. With regard to consumers, a good reputation affects consumer satisfaction. A second objective with regard to consumers is to achieve product differentiation through CSR. A third objective is to reach a high level of customer loyalty through CSR. As Jacoby and Kyner (1973) and Keller (1993) underline, socially-responsible organizations increase customer loyalty since such organizations relate to clients with greater respect, monitor client satisfaction giving fast responses to their claims, and have high standards of security as well as transparent communication about their products. ii). CSR communication with regard to employees may leverage on internal communication (Dawkins & Lewis 2003). The first objective concerning employee CSR communication is to create publicity and a good reputation through word of mouth using CSR. Employees represent a powerful channel through which it is possible to communicate in positive terms about the company. The second objective of CSR communication with regard to employees is to increase employees satisfaction and commitment through CSR. So employees working in an ethical and socially responsible company are more committed to it (Joyner & Payne, 2002). The third objective discussed in the literature with regard to employees is to increase the appeal of the company as a future employer through CSR. The fourth CSR communication objective is to reduce employee turnover through CSR. When employees consider their organization as socially responsible, they are less likely to leave (Bevan & Wilmott, 2002). iii). CSR communication objectives involving shareholders are linked to overall financial communication objectives. A literature review highlights the following two main objectives of CSR communication that support such financial communication objectives. The first CSR objective is to increase the awareness of socially responsible investing (SRI) in the company. SRI takes place when shareholders are willing to consider corporate behavior in terms of its response to multiple stakeholders (Hockerts & Moir, 2004). The second communication objective is to communicate the tangible advantages of the company s CSR strategy. Despite a lack of strictly scientific confirmation, empirical evidence suggests that socially responsible organizations produce more profit than others do. 3.3. CSR Communication Framework- Since creating stakeholder awareness and managing stakeholder attributions are key prerequisites for reaping the strategic benefits of any business initiative, it is imperative for board members instituting a CSR program to have a deeper understanding of key issues related to CSR communication. These include questions surrounding what to communicate (i.e., message content), where to communicate (i.e., message channel), as well as an understanding of the factors (internal and external to the organization) that influence the effectiveness of a CSR campaign. Figure 1 presents a conceptual framework of CSR communication. i). Message Content- CSR communication typically focuses on a company s involvement in various social causes. There are several factors a company can emphasize in its CSR communication, as: CSR commitment - A company can support a social cause in various ways, including donating funds, inkind contributions, or providing other corporate resources such as marketing expertise, human capital and R&D capability. 42

CSR impact - Instead of the input side of its involvement in a social cause, a company can focus on the actual benefits that have accrued to the target audience of a social cause CSR fit - It is the perceived congruence between a social issue and the company s business. Stakeholders often expect companies to sponsor only those social issues that have a high fit, with their core corporate activities. CSR fit may result from common associations that the brand, shares with the cause, such as, product dimensions, affinity with specific target segments, or corporate image associations created by the brand s past conduct in a specific social domain. ii). Corporate Message Channels- There are a variety of communication channels through which information about a company s CSR activities or record can be disseminated. A company can communicate its CSR activities through official documents, such as an annual corporate responsibility report or press releases, and dedicate a section of its official corporate website to CSR; it can also use TV commercials, magazine or billboard advertisements, and product packaging to communicate its CSR initiatives. iii). Independent Message Channels - The external communicators of CSR that are not entirely controlled by the company are: Media Coverage -Researches shows that consumers react more positively to a company s CSR activities when they learn about activities from a neutral source (i.e., an independent organization as media).therefore, although getting media cooperation is often difficult, companies should try hard to get positive media coverage from independent, unbiased sources, such as editorial coverage on TV or in press. Stakeholder word-of-mouth - Companies should try to encourage informal communication channels such as word of mouth by stakeholders. Since employees have a wide reach among other stakeholder groups, companies should tune up their internal CSR communication strategy to convert them into companies CSR advocates. Other powerful stakeholder group is consumers who also serve as an informal communication channel. iv). Company Characteristics - Company specific factors are likely to influence the effectiveness of CSR communication. The influence of these factors is expected to be greater for company-controlled communication than for third-party communication. Corporate reputation - Reputation will moderate the effectiveness of CSR communication because it often serves as a pre-existing schema upon which stakeholders rely to interpret ambiguous information about the company, including its CSR activities. Corporate Industry - The industry in which a company operates will also moderate the effectiveness of CSR communication. For instance, stakeholders are often suspicious of companies in certain industries (e.g., tobacco, oil), an attitude that can pose a major challenge to communication strategists. Marketing Strategies - Refers to the extent to which a company relies on its CSR activities to position itself, relative to competition, in the minds of consumers. v). Stakeholders Specific Factors - Certain characteristics of stakeholders also has the potential to moderate the effectiveness of CSR communication. Stakeholder type - One unique characteristic of CSR communication is that it often has many potential audiences ranging from legislators, business press, investors, non-governmental organizations, local communities, consumers, and employees. Their expectations of businesses and their information needs vary, and thus they respond differently to CSR messages. Therefore, it is imperative for a company to tailor its CSR communication to the specific needs of multiple stakeholder groups. Issue support - Stakeholders support the focal issue of a company s CSR initiative to the extent. Since, 43

issue support reflects stakeholders personal needs and values. CSR information on initiatives that stakeholders deem important or personally relevant is more likely to break the media clutter and receive support. vi). Communication outcomes - After having a sound communication strategy companies may be benefited by two ways. The internal outcome is the awareness which company gained through CSR communication while the external outcome would appear in the form of increased loyalty from different stakeholders. IV. CHALLENGES FOR COMMUNICATING CSR CSR goals are abstract and difficult to communicate to stakeholders. Many corporate equate CSR with corporate philanthropy; this complicates the CSR communication process. For what the companies are actually responsible? How should companies communicate their CSR efforts? How to communicate CSR issues without being criticized? Stakeholder s skepticism in some industries (i.e., Tobacco, chemical), poses difficulties in CSR communication. How to meet different expectations of different stakeholders? Stakeholder s opinion may change overtime. CSR expectations are different across countries and cultures. CSR issues are becoming more unpredictable. There is broader view of social responsibility for corporate to be fulfilled. There exists an authenticity gap between pledges & actual fulfillment of those. V. FINDINGS & CONCLUSION Corporate Social Responsibility has become the new dimension for today s corporate to serve people, however it should be clearly distinguished from corporate philanthropy. CSR is the desirable term to describe the role of business in developing countries as opposed to corporate citizenship, corporate sustainability, or stakeholder management. To make CSR an effective activity issues as mission, vision and values, workplace climate, community involvement, development of the local economy, environment, market relations, and ethics must be communicated. Moreover, the message content of CSR communication is also very important issue for communicating CSR. CSR communication not only achieves various stakeholders loyalty & confidence but it also makes aware the company about its public image & attributions.csr activities have to face many challenges in developing economies like in India. Appropriate channel must be selected for each stakeholder group because employees, clients & shareholders each have different perception towards CSR activities of company. Finally CSR communication is as important for companies as other policy matters, because no firm can last long without pay due consideration for society as a whole, in which it is surviving. VI. REFERENCES [1] Bevan, S. & Wilmott M. (2002), The Ethical Employee, London: The Work Future Foundation/The- Future Foundation. [2] Dawkins, J. & Lewis, S. (2003) CSR in stakeholder expectations: and their implication for company strategy, Journal of Business Ethics, 44:185-193. [3] Esrock, S. & Leichty G. (1998) Social Responsibility and Web Pages: Self Presentation or Agenda Setting? Public Relation Review, 24(3), 305-319. [4] Gray, R., Owen, D. & Adams C. (1996) Accounting and Accountability; Changes and Challenges in Corporate Social and Environmental Reporting. Harlow: Prentice Hall Europe. [5] Hockerts, K. & Moir, L. (2004) Communicating Corporate Responsibility to Investors: The Changing Role of the Investor Relation Function, Journal of Business Ethics, 52: 85-98. [6] Hopkins, M. (1999), The Planetary Bargain: Corporate Social Responsibility Comes of Age, London: Macmillan. [7] Joyner B. & Payne D. (2002) Evolution and implementation: A Study of Values, Business, Ethics and Corporate Social Responsibility, Journal of Business Ethics, 41:297-311. [8] Keller, K.L. (1993) Conceptualizing, Measuring and Managing Customer Based Brand Equity, Journal of Marketing, 57(1):1-22. [9] Ku, G., Lee Kaid, L. & Michael Pfau (2003) The Impact of Web Site Campaigns on Traditional News Media and Public Information Processing, Journalism and Mass Communication Quarterly 80: 528-47. [10] Morsing, M. / Schultz, M. / Nielsen, U. (2008): The Catch 22 of communicating CSR: Findings from a Danish Study, in: Journal of Marketing Communications, Vol. 14,No. 2, pp. 97 111. 44

[11] Suzanne C. Beckmann Strategic CSR Communication - Djoef Publishing. [12] Watts P. and Holme L. (2000), Corporate social responsibility: making good business sense. 45