Question 1 (5 marks): Why do some firms, industries, and cultures have different CSR thresholds than others? Illustrate your answer with real examples for all three categories. (Write a short essay from 1500 to 4000 words to answer the question) Question 2 (5 marks): What is meant by the term “CSR as brand insurance”? Can you give an example of a real firm that has benefited from CSR in this way? Regarding CSR implementation, what additional actions do you suggest the chosen firm do to strengthen its brand? (Write a short essay from 1500 to 4000 words to answer the question)
Question (5 marks): Why some firms, industries, and cultures have different CSR thresholds than others? Illustrate your answer with real examples for all three categories (Write a short essay from 1500 to 4000 words to answer the question) Question (5 marks): What is meant by the term “CSR as brand insurance”? Can you give an example of a real firm that has benefited from CSR in this way? Regarding CSR implementation, what additional actions you suggest the chosen firm to strengthen its brand? (Write a short essay from 1500 to 4000 words to answer the question) ANSWER: Question 1: Corporate Social Responsibility threshold determines when and where CSR should be implemented in the organization The threshold determines whether or not the organization is ready to pursue the policy and, as a result, whether or not it will be implemented The threshold enables the business entity to connect its core business and societal expectations Because of the culture of the organization, the level of competition in the industry, and the nature of the services and products offered, different organizations have different CSR thresholds Implementation of the Corporate Social Responsibility policy varies by organization; for example, the current environment and top management's attitude toward CSR influence the threshold The Corporate Social Responsibility threshold in most manufacturing firms does not change due to environmental factors, unlike in the service industry, where the attitude of top management determines the extent of participation in social activities Corporate Social Responsibility is implemented by some businesses for a variety of reasons Implementing CSR proactively throughout the organization can yield numerous business benefits, as well as additional benefits associated with first-mover status Besides, genuine CSR implementation, whether for offensive or defensive reasons, generates insurance-like benefits that make Corporate Social Responsibility lapses less damaging if they occur due to factors beyond the firm's control Whatever the motivation, every industry has a Corporate Social Responsibility threshold that serves as a CSR point of no return The earlier Corporate Social Responsibility is implemented, the less likely a company is to cross this tipping point, which varies by company and industry (some industries are more susceptible to stakeholder backlash than others) The variable nature of this Corporate Social Responsibility threshold suggests why some companies perceive CSR to be of greater or lesser importance to their particular organization at different points in time Still, why is it that different companies and industries have different CSR thresholds for different reasons? An important part of the answer comes from the business-level strategy a company pursues CSR Thresholds in Firms Analyzing a company's business strategy reveals how it differentiates its products in the market Its strategy captures its value proposition and attracts stakeholder groups, particularly customers In turn, the firm's strategy has a direct impact on that company's CSR threshold within its industry Because these factors differ across industries, the Corporate Social Responsibility threshold will differ from a company to another The CEO of a particular firm may have personal intrinsic motivations to conduct business with a sense of corporate opportunity toward social responsibility This company would most likely create offensive CSR policies as a result of its management's high ethical and social awareness Companies that are not led by such management, on the other hand, may react defensively to consumer demands for Corporate Social Responsibility initiatives for reasons such as avoiding negative media attention or increasing sales For example, The Body Shop which has built its reputation and customer base largely on the social justice issues it chooses to advocate (such as no animal testing and fair trade), the Corporate Social Responsibility threshold at which customers, media, and society react may have a much lower tipping point Thus, The Body Shop’s stakeholders are more likely to have a lower threshold of tolerance for perceived CSR violations Restated, The Body Shop consumers would expect the company to live up to the values that attracted them in the first place, which translates into a correspondingly lower Corporate Social Responsibility threshold for the firm CSR Thresholds in Industries In terms of industries, the businesses within that category's CSR threshold will be determined by the consumer's perception of that industry Companies that sell products are more likely to have lower tipping points than companies that provide services This could be due in part to the fact that the harm caused by services is generally more difficult to quantify than the harm caused by product malfunction or loss Different industries elicit various stakeholder emotions Although there are likely to be differences within the apparel industry, such as between a firm that sells unbranded clothing based on low costs and a firm that uses a focused differentiation strategy that offers a lifestyle brand the industry as a whole (with its reputation for sweatshop labor in developing countries) may have a lower threshold than industries where the connection between product, brand, and customer aspiration is stronger The factors that influence an industry's Corporate Social Responsibility threshold are more intricate than those that determine individual firms' CSR thresholds, with certain industries being more sensitive than others Indeed, a handful of businesses have already exceeded their Corporate Social Responsibility thresholds, prompting corporations in those areas to take considerable corrective action One example is the fast-food industry and its relatively recent conversion to the benefits of health foods Another example, the tobacco industry, passed through its Corporate Social Responsibility threshold long ago On the website, they warn against the dangers of smoking, the health consequences of consuming their products, and recommending tips on how to give up smoking is to know that the industry long ago passed the point of no return in terms of its Corporate Social Responsibility threshold CSR Thresholds in Cultures Furthermore, the expectations of different cultures can have an impact on an organization's CSR threshold In developed countries, the point of view of a company can be defined by created laws and regulatory bodies However, in many other parts of the world, Corporate Social Responsibility is viewed as something that only large corporations must consider While these perspectives are evolving, there are still significant differences in when the CSR threshold is met between these two types of cultures The industry context further complicates matters due to the different stages of acceptance of Corporate Social Responsibility by different competitors Another level of complication is that different firms will approach CSR in vastly different ways due to differences in countries and cultures Corporate Social Responsibility thresholds driven by different cultural expectations further complicate the environmental context for firms Even among developed economies, there are stark differences For example, in the United States, legal action was used to determine Corporate Social Responsibility thresholds for the tobacco, fast food, and asbestos industries In Europe, however, NGO (Non-Governmental Organizations) and nonprofit activism has largely driven the CSR agenda rather than litigation-driven activism However, in much of the developing world, the perception of Corporate Social Responsibility has traditionally revolved around issues of corporate philanthropy, which accounts for only a small portion of the CSR debate in developed economies Although cultural differences exist and have consequences for businesses, globalization and the free flow of information help drive down Corporate Social Responsibility thresholds across the board (reducing stakeholder tolerance and increasing the chance of backlash) As the news media and blogosphere continue to expose corporate CSR lapses and people gain a better understanding of how conditions differ across cultures, societal tolerance for socially irresponsible behavior declines The Corporate Social Responsibility threshold model described here contends that the various thresholds at which CSR enters the radar screens of leaders in various sectors and cultures, as well as between different firms, vary based on a variety of strategic and stakeholder considerations In response to the uncertainties, best practice advocates a proactive CSR policy that delivers a commercial advantage as well as a method of preventing, or at least limiting, negative press and societal reaction Question (5 marks): What is meant by the term “CSR as brand insurance”? Can you give an example of a real firm that has benefited from CSR in this way? Regarding CSR implementation, what additional actions you suggest the chosen firm to strengthen its brand? (Write a short essay from 1500 to 4000 words to answer the question) Why is CSR considered brand insurance? The term refers to corporate CSR effort that helps preserve a company’s brand image if management makes bad decisions or makes decisions that are contrary to prevailing social and cultural norms CSR initiatives build goodwill among people as it is directly related to the well-being of society Increases brand acceptance among people When multinational corporations' competitive strategies rely on worldwide branding, corporate social responsibility provides insurance against management errors Changes in societal expectations, prosperity, and globalization all contribute to the practical necessity for Corporate Social Responsibility as brand insurance An often-overlooked but important benefit of CSR is that it protects a company's reputation in the face of adversity Furthermore, a company that excels at both doing good and avoiding harm suffers almost no reputational damage as a result of negative media coverage Corporate actions that go against societal expectations harm, if not destroy, brand image among networked stakeholders who are wealthy enough to purchase branded goods and services Leaders who build an organizational-wide commitment to CSR as a method of redefining profit maximization pay the fees for CSR brand insurance Management is best positioned to maximize shareholder returns over the long term by incorporating a stakeholder viewpoint Globalization trends, rising income, and altering societal expectations make CSR a strategic element in brand-based initiatives, since CSR helps a firm acquire social legitimacy Jill Klein and Niraj Dawar of Ivey Business School (Western University) revealed that when a firm has a solid CSR track record, customers are more inclined to blame product problems on external reasons To put it another way, excellent environmental performance acts as "reputation insurance" in the case of a productharm crisis Social legitimacy, in turn, increases the brand's long-term competitive advantage among important stakeholder groups, notably socially concerned customers In anticipation of real or perceived management failings, CSR must be embedded into the firm's strategies That is, brand insurance is required to preserve what has frequently become a critical component of business value: the brand Corporate Social Responsibility as brand insurance is needed because even the most famous brands have substitutes Do Nike's sneakers actually better than Adidas'? Is Apple's quality any better than Samsung? A corporate social responsibility attitude spread throughout the business strengthens the brand-user link, making the brand less vulnerable to internal management errors Savvy non-governmental organizations (NGOs) and consumer advocates who understand how to engage the always-on media can magnify the effect of CSR blunders Their activities may jeopardize the implicit relationship between the brand and its customers These organizations may carry the danger of disclosing specific and often emotionally charged CSR failures further and quicker than ever before Let's go straight to the brand The goal of branding is to create a connection between stakeholders and brands The strategic relevance of Corporate Social Responsibility develops in combination with the value of this connection Executives struggle to employ costbenefit analysis to avert future issues with unclear likelihood However, these are perfect conditions for insurance, not insurance that pays you after a disaster, but rather classic boiler insurance that focuses on proactive protection Firms need CSR not because they have a pressing problem right now, but so that they can avoid (or at least mitigate) problems that weaken their brand in the future As the ancient Chinese philosopher Sun Tzu observed, Subjugating the enemy’s army without fighting is the pinnacle of excellence Simply put, Corporate Social Responsibility represents conflict prevention and can be thought of as modern day boiler insurance Benefits that The Body Shop gets from “CSR brand insurance” The Body Shop is a British cosmetics and skin care products company founded in 1976 by Dame Anita Roddick The Body Shop establishes brand image through three main parts, namely symbolic, attributes, and benefits by understanding its initial brand positioning as a company that is dedicated to producing natural bath and body products that support fair trade, animal rights, human rights, and eco-friendly processes for people who care about these issues Throughout the years, The Body Shop has consistently pursued the mission statement "To dedicate our business to the pursuit of social and environmental change." The company establishes financial support for pioneering organizations in areas such as human rights, environmental and animal protection Three well-known policies that The Body Shop taken as their core values of the product are Against Animal Testing, Support Community Trade and Protect Our Planet In 2006, The Body Shop was purchased by L’Oréal which is not against animal testing This move has raised a huge controversy around the supporters of The Body Shop, however the company clarified that it is operated independently within the L’Oréal Group In 2017, The Body Shop was sold by L’Oréal in a € billion deal to the ethical B-Corp Brazilian cosmetics company Natura The combined group has a turnover of $3.5 billion and 17,000 employees The sale to Natura was widely hailed as a return to responsible activism Until now, The Body Shop is still the icon of ethics and a model of CSR business in cosmetic industry Through Corporate Social Responsibility activities, The Body Shop saves a huge amount of money by not advertising but to put more efforts in social activities than other mainstream cosmetic brands, which gives it a same effect of publicity It is an alternative way to generate mass publicity for the company without throwing big money to capture rosy commercial advertisement A very good example of this is The Body Shop’s first major campaign in 1986 which is alliance with Greenpeace in UK, “Save the Whale” This campaign has helped to promote the new product line of The Body Shop which is using jojoba oil as the ingredient to substitute the whale spermaceti The Body Shop has highly concentrated on developing a drastically different image which is more focused on the ethical value and natural quality in it The company has succeeded in challenging the accepted value curve of luxury cosmetics and beauty products to create one based on more ethical values The social activism approach that taken by The Body Shop has created a whole new group of consumer which is ethical living oriented This is a very smart step taken by The Body Shop, not only building customer loyalty based on distinctive ethical values, the company itself also benefits from gaining a high reputation and fame for environment friendly and contribution to the public This unique positioning of The Body Shop also made itself more invulnerable from price cutting wars The company has presented such a distinct motive compared to other profit oriented corporations The loyal consumers convey that they choose The Body Shop because of the brand’s stand for the environment and social issues The mental associations held by the consumers about the brand has added to the perceived value of their products Example of The Body Shop that clearly demonstrates the implementation positive environmental practices and cultivating a good Corporate Social Responsibility image serves as a form of “insurance” in a product failure situation 10 Business leaders in consumer-focused industries who still struggle to make the business case for sustainability should frame CSR investments to senior managers as risk management or reputation management activities that pay off when products fail Additional actions for The Body Shop to strengthen its brand The Body Shop values ethical business and continue to develop the business with a focus on people, products and the planet To maintain a long-term relationship with customers, the company should remain involved in numerous community campaigns such as the Stop Sex Trafficking, the Fair Trade program, and the antianimal testing campaign in order to raise the brand's standard and improve the environment's performance The Body Shop also contributes to increasing awareness about the need of minimizing plastic bottle waste; reduce the environmental footprint of its stores every time it refurbishes or redesigns them; develop and deliver three new sustainable packaging innovations; ensure that 70% of total product packaging does not contain fossil fuels; reduce energy use of all stores every year by 10% About products, The Body Shop must ensure 100% of natural ingredients are traceable and sustainably sourced; reduce year-on-year the environmental footprint of all product categories; publish use of ingredients of natural origin, ingredients from green chemistry, and the biodegradability and water footprint of products; develop an innovation pipeline that delivers pioneering cosmetic ingredients from biodiversity hotspots and which helps to enrich these areas 83% of The Body Shop consumers prefer to shop at stores that care about social and environmental concerns, and where the goods are manufactured in an ecologically 11 responsible and aesthetic way As a result, the anti-animal testing campaign has become one of the most popular ways to promote The Body Shop's brand The company promotes its products and campaigns through a lot of video, social media and in-store content and less focus is put on marketing via television The brand is testing channels like Instagram, Pinterest, and Snapchat and they seem to be working extremely well for the target market Corporate Social Responsibility, in terms of brand management, is not a question of businesses trying to attain some kind of higher plane or social good Global companies not have to commit themselves to saving the whales or even extend their sphere of concern any wider than their immediate operations and geographic location Nor is CSR a question of right over wrong in any absolute sense Rather, it is a relative question of what constitutes good business practices now, with an eye for emerging societal demands that shape tomorrow’s expectations Corporate Social Responsibility is about incorporating common sense policies into corporate strategy, culture, and day-today decision making to meet stakeholders’ needs, broadly defined It is about creating strategies that will make firms and their brands more successful in their turbulent environments Stripped of the emotionalism and name calling, we see CSR as brand insurance 12 REFERENCE Andrew, M (2016, February 29) The Body Shop goes for a green makeover with a new CSR strategy Retrieved from https://www.cosmeticsdesign- europe.com/Article/2016/02/16/The-Body-Shop-goes-for-a-green-makeover-withnew-CSR-strategy David, C (2014) Corporate Social Responsibility: A Strategic Perspective Business Expert Press Jill, K., Niraj, D (2004) Corporate social responsibility and consumers' attributions and brand evaluations in a product-harm crisis International Journal of Research in Marketing, 21, 203-217 Michele, B (2018, July 10) The Body Shop: Challenging the Future Retrieved from https://impakter.com/bodyshop-challenging-future/ William, B W (2010) Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2nd ed.) Sage Publications William, B W., David, C (2005) Strategic corporate social responsibility as global brand insurance Business Horizons, 48, 317-324 ... CSR strategy Retrieved from https://www.cosmeticsdesign- europe.com/Article/2016/02/16/The-Body-Shop-goes-for-a-green-makeover-withnew-CSR-strategy David, C (2014) Corporate Social Responsibility:... brand-user link, making the brand less vulnerable to internal management errors Savvy non-governmental organizations (NGOs) and consumer advocates who understand how to engage the always-on media... take considerable corrective action One example is the fast-food industry and its relatively recent conversion to the benefits of health foods Another example, the tobacco industry, passed through