Abstract: Corporate Social Responsibility: The New Competitive Advantage

One of the major challenges that managers face today in order to be competitive is the growing demand for corporate social responsibility. Most businesses compete on efficiency, price, or the level of quality or service as their competitive advantage. The purpose of this paper is to show that managers can think strategically and utilize corporate social responsibility (CSR) as a new source of competitive advantage to ensure long-term business competitiveness and success.

There are many aspects to CSR that managers can act on to gain a competitive advantage. The most common being philanthropic and environmental sustainability will be developed further in this paper. However there are several other aspects to CSR including a commitment to diversity, business ethics, legal, and economic. These components of CSR are necessary for companies to build a positive reputation and will help managers realize several benefits including better access to human and intellectual capital with diversity in the workplace, better access to financial capital and a corporate identity that others trust by building ethics into the corporate culture, and increased shareholder value and increased revenue by maximizing shareholder wealth with economic CSR. These benefits, as well as others such as strategic branding and operational efficiency can be achieved through philanthropic and environmental CSR.

Another form of philanthropic CSR that can yield a competitive advantage is cause related marketing. Cause related marketing is a form of marketing which partners a corporation with a non-profit for a mutual benefit relationship. There are several corporations and non-profits that have utilized cause related marketing such as Yoplait and Susan G. Komen, Mariott and March of Dimes, and of course the largest cause related marketing program Product Red with companies such as Motorola, Apple and the Gap. Environmental sustainability is the final major portion of CSR that managers can utilize to create a competitive advantage. Managers in business, government, and non-profit organizations need to understand how their business affects the environment and how to balance the needs of maximizing profit with those of the environment.

In conclusion, the term corporate social responsibility involves many aspects of business and is defined different ways by different people. Simply, it’s how a business decides to do what they think is right. It may be what’s right for society, by having a diverse workforce that allows their business to capitalize on the potential human and intellectual capital that’s available. It may be what the business feels is ethically and legally right. They may express their decisions in a code of conduct that all employees are expected to work by. When many hear the term ‘corporate social responsibility’ they immediately think of companies donating large amounts of their profits to various philanthropies, a way of sharing the wealth. While this may be true in some cases, businesses don’t need to just donate large sums at random. In fact, they can donate to their advantage by effectively marketing their donations, choosing a few causes to get more involved in, or sharing in the profits through cause-related marketing. A growing trend for businesses today is becoming environmentally sustainable as a form of doing the right thing.

Marketing the New Green

Just read an interesting article: "MARKETING THE NEW GREEN: Companies should be rightfully proud of their environmental improvements. So why can't they market those achievements without seeming mercenary?" by Jessica Tsai.

Some major points from the article:

-The reality is that, among existing companies, green processes are usually just a byproduct of cost-saving or efficiency- improving projects.

-In 2008, Acutate began seriously considering ‘going green’ and put Seema Haiiji, senior product marketing manager in charge of the initiative. Haiiji developed the Acutate Sustainabllity Management report, which includes interactive dashboards, sustainability scorecards, and strategy maps to help companies measure overall employee satisfaction, environ- mental impact, access to training and education, and community engagement

Top 6 trends in going green:

• o Integrating green initiatives into every aspect of the organization
• o Using ecolabels and ecologos on products or marketing materials
• o Engaging customers in green marketing
• o Adopting a lifecycle approach
• o Shifting to the online space
• o Asking and respecting customer choices and preferences

Many companies realize that going green is not only emerging as a huge competitive advantage but as a way to cut energy costs and improve brand image. Managers in business, government, and non-profit organizations need to understand how their business affects the environment and how to balance the needs of maximizing profit with those of the environment. The trend of going green is becoming very popular as businesses begin making improvements as little as adding recycling bins and changing window shades to major changes in the ways they do their business. Some businesses will take advantage of this trend and promote their efforts dubiously through green washing. However, with resources available on the Internet, consumers are privy to immense amounts of information and cannot be fooled as easily as before.

Marketing the New Green

Scoop it Forward

Recently Target and Ben and Jerry's partnered together to launch a new volunteering initiative. You can check out this website to find somewhere in your community to volunteer. Then receive a coupon to get your FREE ice cream at your local Target. Ben and Jerry's has 2 target exclusive flavors, cleverly named "Brownie Chew Gooder" and "Berry Voluntary."

This is a great partnership between Target and Ben and Jerry's. This initiative flows nicely with both company's mission statements and CSR activities. It seems like a win-win collaboration for both companies. The coupons help to get customers (or guests as we call them) into the store where they end up purchasing even more stuff. Both companies build a better brand image and market the fact that they are involved in the community.

I scream you scream we all scream for ice cream!

Diversity in the workplace

Companies that are able to develop diversity programs can create a competitive advantage by capitalizing on human capital. According to the “Top 50 Companies for Diversity” list by Diversityinc, Verizon, Consolidated Edison CO. of NY, the Coca-Cola Co., Health Care Service Corp and HBO are the top 5 companies for Diversity (Diversityinc). Diversityinc developed their list by asking questions on diversity training, employee-resource groups, mentoring, and multicultural marketing. DiversityInc, researched women- and minority-owned businesses and assessed the CEO’s direct involvement in diversity initiatives. Most companies have developed diversity programs as a part of their overall CSR strategy. For example,

· CIGNA strives to create and support an environment that attracts and retains the most talented, ethical, well-trained, mutually supportive and diverse people. An ethnically and culturally diverse workforce mirrors our customer base, and is important to increasing profitability and building shareholder value in the company.

· At Dupont, More than half of DuPont's new hires for professional and management positions are minorities and women.

· Microsoft has programs in place to acquire talent from the African American community. Those programs include efforts with national organizations, historically black colleges & universities (HBCUs) and those with high African American enrollment, advertising in ethnic media and via Pathways, a newsletter targeted to professionals from diverse cultural backgrounds.

· At Walt Disney, fostering a best place to work environment, attracting top diverse applicants, having minorities and females well represented in key positions and providing more opportunities for flexibility in the workplace are part of the company's employment-related diversity initiatives.

How does your company promote diversity in the workplace?

CSR as a Competitive Advatage

Most companies compete on the basis of price or the level of quality or service as their source of competitive advantage. Could your business create an even better competitive advantage by building a positive CSR?

Today's consumer expects some level of CSR, but you could your business act on potential social, economic, or environmental advantages that can help your bottom line? Not only is CSR better for the community, but the business reaps the benefits as well. Depending on the form, your CSR involvement could build a better brand image, increase revenues through cause-related marketing, and create shareholder value. Going green can help to increase efficiency through environment conservation and recycling initiatives. Plus, having a positive CSR reputation can help you attract better employees, make it easier to get financial capital, and help maintain and attract consumers as they become more aware of your CSR efforts.

Has your company utilized this form of competitive advantage? If not, why? What do you think the drawbacks are?

Cause Related Marketing and Product RED

I recently read the article "Bono's Product (RED) Initiative: corporate social responsibility that solves the problems of 'distant others" and learned about one form of CSR, cause related marketing.

Here are some key points from that article:

• The Product (RED)TM initiative was launched by Bono at Davos in 2006. Product RED is ‘a brand created to raise awareness and money for The Global Fund to Fight AIDS, Tuberculosis and Malaria by teaming up with iconic brands to produce RED-branded products’.
• Consumers can help by shopping at American Express, Apple, Converse, Gap, Emporio Armani, Hallmark and Motorola, where a portion of the proceeds go to the Global Fund
• CSR has developed over the last few decades ranging from Corporate Philanthropy initiated by Andrew Carnegie and John Rockafeller who donated millions to charitable causes to focusing on issues during the 1960’s relating to labor practices and employee and product safety. After the emergence of sweatshops in the 1980’s and 90’s many corporations began to include Social Responsibility as a part of their overall strategic plans and codes of conducts.
• Recently, we have seen the emergence of cause-related marketing in which the marketing of a brand, company, product or service is tied directly to a social cause, most often with a proportion of the sales going to support the cause.
• The RED initiative was formally launched at the World Economic Forum in Davos in early 2006, with several other companies joining over the next few years. These companies offer a variety of products and services at a range of prices with proceeds donated to Product Red.
• Benefits of cause related marketing with Product Red range from increase of sales of Product RED items, to building a better brand image.

Cause related marketing is a form of marketing which partners a corporation with a non-profit for a mutual benefit relationship. There are several corporations and non-profits that have utilized cause related marketing such as Yoplait and Susan G. Komen, Mariott and March of Dimes, and of course the largest cause related marketing program Product Red with companies such as Motorola, Apple and the Gap. Cause related marketing is a unique form of CSR in that it allows the consumer to identify with the charity in which their purchase is helping to fund. Cause related marketing is a win-win situation in that the partnership between the companies helps to build a better brand image, increase sales and help the non-profit. When consumers are making purchase decisions they expect the corporations to do more than just make a profit, they expect them to improve the well being of others; whether it is in the local community or within the global environment. With the success of Product RED, it is likely that many more companies will try their hand at cause related marketing as a form of their Corporate Social Responsibility in the near future.