Kumbirai N Mashungupa

C13122086E

CHINYOYI UNIVERSITY OF TECHNOLOGY

Name Kumbirai N Mashungupa

Registration number C13122086E

Course CUEB 104

Program BSEBM

Level 1:1

Assignment 1

QUESTION

Citing practical example argue for and against the assertion that
corporate social responsibility is nothing but a marketing gimmick

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Introduction

M a r k e t i n g i s a p r o c e s s o r s ys t e m o f r e s e a r c h i n g i n t o i d e n t i f yi n g
c o n s u m e r n e e d s a n d w a n t s a n d a p p l yi n g s u i t a b l e p r i c e , p r o d u c t , p l a c e
a n d p r o m o t i o n s t r a t e g i e s i n o r d e r t o s a t i s f y t h e s e n e e d s p r o f i t a b l y.
P h r a s e s l i k e ‘ m a r k e t i n g g i m m i c k s ’ , ‘ m a r k e t i n g p l o ys ’ a n d ‘ m a r k e t i n g
tricks’ abound. The result is that marketing is condemned by
association.

The word gimmick refers to a trick or device intended to attract

attention rather than fulfil a useful purpose.

The question implies that we should argue and decide on whether

corporate social responsibility is a gimmick after citing, firstly the
a d v a n t a g e s t o t h e f i r m , t h e a d v a n t a g e s t o t h e c o m p a n y, a n d t h e
disadvantages which the business might suffer from. Also
d i s a d v a n t a g e s t o t h e s o c i e t y i f a n y.

Definition of terms

Paul Hohnen in Corporate Social Responsibilit y An Implementation

G u i d e f o r B u s i n e s s s a ys “ S o c i a l r e s p o n s i b i l i t y ( i s t h e ) r e s p o n s i b i l i t y o f
an organisation for the impacts of its decisions and activities on
society and the environment through transparent an d ethical behaviour
that is consistent with sustainable development and the welfare of
society; takes into account the expectations of stakeholders; is in
compliance with applicable law and consistent with international
norms of behaviour; and is integrate d throughout the organisation.”

The key factors for CSR are:

 Enlightened self-interest - creating a synergy of ethics, a

cohesive society and a sustainable global economy where
markets, labour and communities are able to function well
together.
 Social investment - contributing to physical infrastructure and
social capital is increasingly seen as a necessary part of doing
business.
 Transparency and trust - business has low ratings of trust in
public perception. There is increasing expectation that companies
will be more open, more accountable and be prepared to report
publicly on their performance in social and environmental arenas
 Increased public expectations of business - globally companies
are expected to do more than merely provide jobs and contribute
t o t h e e c o n o m y t h r o u g h t a x e s a n d e m p l o ym e n t . ”

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History of corporate responsibility

In classical economic theory a business was sociall y responsible if it

maximized profits while operating within the law. In the early 1800s
wealthy entrepreneurs such as Steven Girard began to give large gifts
and bequests to schools and other worthy causes. They were followed
by entrepreneurs who made fortunes during the economic growth of the
late 1800s. John D. Rockefeller and Andrew Carnegie are examples of
industrialists who turned into great philanthropists. The rise of social
Darwinism in the last half of the nineteenth century braked expansion
of the social responsibility idea. Popularized by Herbert Spencer,
s o c i a l D a r w i n i s m h e l d t h a t c h a r i t y, w h i c h s u p p o r t e d w e a k e r a n d l e s s
successful individuals, ran contrary to the harsh reality of evolution.
And it was evolution, not soft -headed benevolence that brought
progress. Social Darwinism justified ruthless, predatory competition.
Early in the twentieth century t hree interrelated ideas emerged to
justify broader corporate responsibility. Managers were trustees, or
agents of corporate power whose positions implied a duty to protect
stakeholders. Managers had an obligation to balance the multiple
interests of stakeholders. The service principle was a near-spiritual
belief that individual managers served society by building successful
businesses. The prosperity they created would eradicate broad social
i l l s s u c h a s p o v e r t y . N o t e v e r yo n e s u b s c r i b e d t o t h e s e e x p a n s i o n s o f
the social responsibility doctrine. Henry Ford, for example, ruthlessly
maximized profits at the expense of workers. But others such as
General Robert E. Wood of Sears, Roebuck accepted expanding duties
t o w a r d s o c i e t y.

“Corporate social responsibility (CSR) has been transformed from an

irrelevant and often frowned -upon idea to one of the most orthodox and
widely accepted concepts in the business world during the last twenty
years or so” (Lee, 2008, p. 53).

The above quote lets us know that the way busi ness is viewed has
changed over the years. A concept that was once seen as a total waste
of resources has now become an essential part. This has changed
b e c a u s e t h i s g e n e r a t i o n i n c o m p a r i s o n w i t h t h e p r e v i o u s b u ye r h a s
m o r e c h o i c e , a n d b u yi n g p o w e r t h u s t h e c o n s u m e r s t h e s e d a ys o n l y
settle for what they consider the best, not necessarily the best that’s on
offer.

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Advantages of corporate social responsibility to the firm

Reputation management . Organizations that perform well with regard to

CSR can build their reputation, while those that perform poorly can
damage brand and company value when exposed. Reputation, or brand
e q u i t y, i s f o u n d e d o n v a l u e s s u c h a s t r u s t , c r e d i b i l i t y, r e l i a b i l i t y,
q u a l i t y a n d c o n s i s t e n c y. E v e n f o r f i r m s t h a t d o n o t h a v e d i r e c t r e t a i l
exposure through brands, their reputation for addressing CSR issues as
a supply chain partner —both good and bad—can be crucial
c o m m e r c i a l l y.

Enhances ability to recruit, develop and retain staff . This can be the
d i r e c t r e s u l t o f p r i d e i n t h e c o m p a n y’ s p r o d u c t s a n d p r a c t i c e s , o r o f
introducing improved human resources practices, such as “family -
f r i e n d l y” p o l i c i e s . I t c a n a l s o b e t h e i n d i r e c t r e s u l t o f p r o g r a m s a n d
a c t i v i t i e s t h a t i m p r o v e e m p l o ye e m o r a l e a n d l o ya l t y. E m p l o ye e s a r e n o t
only front-line sources of ideas for improved performance, but are
champions of a company for which they are proud to work for.

Enables improved innovation, competitiveness and market positioning .

CSR is as much about seizing opportunity as avoiding risk. Drawing
feedback from diverse stakeholders can be a rich source of ideas for
new products, processes and markets, resulting in competitive
advantages. For example, a firm may become certified to environmental
and social standards so it can become a supplier to particular retailers.
T h e h i s t o r y o f g o o d b u s i n e s s h a s a l w a ys b e e n o n e o f b e i n g a l e r t t o
t r e n d s , i n n o v a t i o n , a n d r e s p o n d i n g t o m a r k e t s . I n c r e a s i n g l y,
mainstream advertising features the environmental or social benefits of
p r o d u c t s ( e . g . , h yb r i d c a r s , u n l e a d e d p e t r o l , 1 4 e t h i c a l l y p r o d u c e d
coffees, wind turbines, etc.).

Improved ability to attract and build effective and efficient supply

chain relationships. A firm is vulnerable to the weakest link in its
suppl y chain. Like-minded companies can form profitable long -term
business relationships by improving standards, and thereby reducing
risks. Larger firms can stimulate smaller firms with whom they do
business to implement a CSR approach. For example, some large
apparel retailers require their suppliers to comply with worker codes
and standards.

Enhanced ability to address change . A company with its “ear to the

ground” through regular stakeholder dialogue is in a better position to
a n t i c i p a t e a n d r e s p o n d t o r e g u l a t o r y, e c o n o m i c , s o c i a l a n d
e n v i r o n m e n t a l c h a n g e s t h a t m a y o c c u r . I n c r e a s i n g l y, f i r m s u s e C S R
as“radar” to detect evolving trends in the market.

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C r e a t e s “ s o c i a l l i c e n c e ” t o o p e r a t e i n t h e c o m m u n i t y. I m p r o v e d c i t i z e n
and stakeholder understanding of the firm and its objectives and
activities translate into improved stakeholder relations. This, in turn,
may evolve into more robust and enduring public, private and civil
society alliances (all of which relate closely to CSR reputation,
discussed above). CSR can help build “social capital.”

Drucker,The Practice of Management (1955), p. 382“ what is most

important is that management realize that it must consider the impact
of every business policy and business action upon society. It has to
consider whether the action is likely to promote the public g ood, to
a d v a n c e t h e b a s i c b e l i e f s o f o u r s o c i e t y , t o c o n t r i b u t e t o i t s s t a b i l i t y,
s t r e n g t h a n d h a r m o n y. ”

There are also benefits which the society will enjoy in the short term.
Their memories of the socially responsible business will last forever.

Advantages for the society

Employment. The immediate society will gain greatly from this because
s i n c e t h e y w i l l b e e a r n i n g s a l a r i e s . S a l a r i e s i n c r e a s e b u ye r / c o n s u m e r
p o w e r , t h i s m e a n s t h a t t h e e m p l o ye e s w i l l b e a b l e t o p u r c h a s e g o o d s
and enjoy certain services which they could not before. The
g o v e r n m e n t w i l l e n c o u r a g e t h i s b e c a u s e t h e u n e m p l o ym e n t l e v e l s o f t h e
country will reduce.

Gross Domestic Product (GPD). This refers to the overall amount of

produce which industry of any country achieves within a time pe riod of
a ye a r . B e c a u s e o f e m p l o ym e n t , s a l a r i e s w h i c h r e s u l t i n i n c r e a s e b u ye r
power, the people of the society will seek better living conditions.

Ethics. The social responsibility of business involves ethics which

must be reflected in the philosophy of business organisation. To be
effective, a sound ethics must be recognised by top management and
reflected in the policies of the fir m. Members should voluntarily accept
it.

R i g h t l e a d e r s h i p , i n t e g r i t y, p r o f i c i e n c y , c o m m i t m e n t t o s o c i a l v a l u e s o f
a manager can change the expected behaviour of individuals

Top management commitment, leadership, examples are crucial to

corporate ethics/ culture. This commitment is communicated in many
w a ys s u c h a s - s p e e c h e s , d i r e c t i v e s , c o m p a n y p u b l i c a t i o n s , p o l i c y
statements and most importantly actions. Top management should
establish clear policies that encourages ethical behaviour

Management must assume responsibility for disciplining wrong doers

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Companies should provide mechanism for whistle blowing as a matter
o f p o l i c y . A n y e m p l o ye e b e c o m e s a w a r e o f u n e t h i c a l b e h a v i o u r s h o u l d
be encouraged to report incident to his superior

Managements should give training/ orientation programmes explaining

their organisation’s code of ethics. By offering course in the business
ethics in MBA programmes helps in creating conscientious managers
with a morally responsible approach to business

Disadvantages of being socially responsible to the firm

Role of Profit. One of the biggest features addressed by CSR is its

intent to cause companies to recognize responsibilities to stakeholders
outside of shareholders. This includes customers, communities,
e m p l o ye e s a n d s u p p l i e r s . W h i l e p r o p o n e n t s o f C S R p o i n t o u t t h e l o n g -
term benefits of taking care of these core relationships, shareholders
a r e o f t e n d e t e r r e d a t t h e n o t i o n t h a t c o m p a n i e s w i l l i n v e s t i n a n yt h i n g
that does not create immediately obvious financial gain. With CSR,
detecting measurable bottom line benefits is a challenge as social and
environmental programs are hard to account for with regard to financial
gain.

Competitive Disadvantage . One of the most common arguments

companies make when indicating reluctance to CSR policies is the
disadvantage it causes against companies that do not. In other words, if
company A does its part to invest resources to take care of its
communities and the environment and company B does not, company B
retains its resources, including money, for other business pursuits.
Thus, without strict adherence industry wide, some companies argue
that they cannot fall b ehind by putting money into CSR programs.

Loss of Focus. A main driver at the onset of CSR was increased interest
in making the customer a primary focus of business operations. This
coincides with continued realization that customer retention and
l o ya l t y a r e k e ys t o l o n g - t e r m b u s i n e s s s u c c e s s . D e t r a c t o r s o f C S R a s a
major component of corporate governance argue that guidelines have
e x p a n d e d b e yo n d t h i s b a s i c i n i t i a l e m p h a s i s . D a v i d V o g e l p o i n t s o u t i n
his "CSR Doesn't Pay" article for Forbes that many companies that
abide by CSR guidelines do so more from fear of public backlash than
because they believe it is good for long -term business performance. He
adds that most parties generally agree that taking care of customers is
good in the long run, but expensiv e requirements in human rights,
environmental sustainability and community development are too much
to ask of many companies.

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Lasting Impact. How long CSR will remain a prominent business
concern is a common question asked by those who argue against CSR as
a major concern with corporate governance. According to the My
E f f i c i e n t P l a n e t w e b s i t e , C S R h a s e x i s t e d f o r m o r e t h a n 5 0 ye a r s .
However, its prominence as a major business consideration has
certainly increased in the 21st century due to heightened awaren ess of
ethical issues in business and environmental preservation standards.
Detractors argue that CSR emphasis is a short -term fad in response to
prominent scandals like Enron, and current interest in green -friendly
practices.

Evaluation

Corporate social responsibility shows stakeholders of the amount of

c o m p a s s i o n w h i c h t h e f i r m h a s t o w a r d s t h e s o c i e t y, t h e e n v i r o n m e n t
they live in and the people they serve or live amongst. There are four
dimensions of corporate responsibility namely economic, legal, ethi cal,
voluntary and philanthropic.

Economic. For the firm maintaining corporate responsibility may be

c o s t l y. I n f a c t I t h i n k b u s i n e s s e s o n l y e n g a g e i n i t a t t h e e n d o f t h o s e
years when they have made exceptional profits or if they have a fair
p r o f i t m a yb e b i a n n u a l l y. M o s t o r g a n i s a t i o n s w i l l a i m t o m a k e m o r e
profits during the time period that they take part in contributing to
s o c i e t y. F o r e x a m p l e , w h e n T M s u p e r m a r k e t o r O K s u p e r m a r k e t h o s t
town clean up’s and the OK grand challenge, they are contributing to
societ y in providing entertainment and environment awareness. If these
two firms did not make any financial progress they would hold back on
the activities in the future.

Legal. The relationship between the law and social responsibility

covers issues such as; performance reporting and the law , corporate
governance and disclosure, bribery and requirements under different
jurisdictions.
John Manzoni, Chief Executive, Refining & Marketing, BP plc
24 “Part of the bargain, the social contract which allows comp anies to
be as large as they are, is that they become engaged in the challenges
the world faces, rather than dismissing them as someone else’s
problem.”

Ethical. Robbins, Coulter, Sidani and Jamali (2011), “Being ethical

means doing the right thing for th e right reasons at the right time
without being influenced by internal or external factors, whatever they
may be.”
B . D yk e a n d N e u b e r t ( 2 0 0 5 ) p o i n t e d o u t t h a t ; e t h i c s i s a s ys t e m o f
moral principles that differentiate right from wrong. Ethics can be seen

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as a profit making objective for an organisation. Stakeholders have an
influence to organisational views on right or wrong taking into
consideration justice and sustainability. Thus meaning that the firm
shouldn’t aim to make a profit at all costs, rather these compa nies no
matter how big or small should do the morally correct and just.

Voluntary and philanthropic. My understanding of this is being a

c o r p o r a t e c o m p a n y, b y j u s t g i v i n g t i m e t o b e t t e r t h e c o m m u n i t y i n a
way that promotes human welfare. For example the telecommunications
company – Net One. Net One put pegging in highway which they really
didn’t have to. This was voluntary corporate responsi bility.

Conclusion

Corporate social responsibility is nothing but a marketing gimmick to a

greater extent because according to the Liberian international ship and
corporate registry the results of corporate social responsibility include
recruitment, motivation, retention and cost savings in the long term.
The following results are all depend on marketing thus I support the
statement

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References