Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 17 CORPORATE SOCIAL RESPONSIBILITY AND ETHICS
(reduced pollution, lower energy use), but at the same time achieved business goals (rein-
forcing the company’s leadership, strengthening customer relationships, faster take-up of 
newer, more efficient products and technologies). The link between this CSR initiative and 
the company’s business model and value proposition is clear. 
Similarly, Microsoft has partnered with governments in less developed countries to offer 
Microsoft Windows and Office software packages for a few dollars to governments that 
subsidise the cost of computers for schoolchildren. The potential business benefit for Micro-
soft is to double the number of PC users worldwide, and reinforce the company’s market 
growth. The social benefit is the greater investment in technology in some of the poorest 
countries in the world, with the goal of improving living standards and reducing global 
inequality ( Financial Times , 2007). 
On the environmental front, General Electric – the largest company in the world – has 
its well-established ‘Ecomagination’ initiative. Ecomagination has grown out of GE’s 
long-term investment in cleaner technologies, and places these technologies under a single 
brand. To qualify for Ecomagination branding, products must significantly and measurably 
improve customers’ environmental and operating performance. However, the Ecomagina-
tion vision is driven by the principle that its green initiatives will have a positive impact on 
GE’s competitive position and financial performance ( Harvey, 2005 ; Hart, 2005 ). 
CSR strategy at companies such as Dell Inc., Microsoft and GE may provide a prototype 
of linking CSR to competitive advantage that will influence management thinking.
17.7 
How companies are responding to the CSR mandate 
The ways in which companies are developing responses to the imperatives to display more 
ethical and socially acceptable policies are not well codified. Certainly, there is wide recogni-
tion that firms face choices in their responsiveness to social responsibility. For example, cor-
porate social responsiveness may reflect models or philosophies, ranging from ‘do nothing’ 
to ‘do much’ ( Carroll, 1979 ). However, responsiveness alone may not be the same as good 
corporate citizenship. For example, a responsive organisation may address social pressures 
by moving to a less demanding environment – consider the growing emphasis from tobacco 
companies on the relatively unregulated developing countries, where tobacco consumption 
remains socially acceptable. The simple prescription of responsiveness oversimplifies the 
complexity of the situations that companies face. The issue is how a company responds, 
and what its responses represent to its stakeholders. There is also potential insight from 
benchmarking and making comparisons with competitors. 
Certainly, there is a dilemma for some companies if their existing business model relies 
on resources and capabilities that become questionable in terms of social responsibilities 
and duty. We noted earlier that Primark is a very successful British fashion retailer. The 
Primark business model relies on sourcing fashion items from low-cost manufacturing areas 
and turning catwalk trends into products in as little as two weeks at extremely low prices. 
The result is that Primark buys from suppliers whose workers are paid as little as 9p an 
hour, working 90 hours a week in extremely poor conditions. Notwithstanding the com-
pany’s ‘charm offensive’ in the ethics and social responsibility field – and the company’s 
efforts to stop buying from suppliers using child labour ( Urry, 2008 ) – the dilemma is that 
the low-price, lean supply chain business model relies on low-cost suppliers. This dilemma 
is shared by other low-price fashion retailers, including Tesco and Asda. 
The urgency of the issue is underlined by escalating transparency – for example, the 
growth in the use of new software packages that allow consumers and rivals to trace the 
provenance of products. Many companies have stopped using suppliers where there are 
suspicions of the use of forced or child labour, or conflict materials are present – not least 
because of the ease with which these facts can be identified by consumers. For example, 

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HOW COMPANIES ARE RESPONDING TO THE CSR MANDATE
GoodGuide provides an online database of verified information regarding the health, envi-
ronmental and social impact of more than 250,000 common products (Tyrell, 2010).
Figure 17.5 presents a framework for evaluating the ways in which companies are 
responding to pressures encouraging the adoption of corporate social responsibility initia-
tives in business and marketing strategy. This model suggests that responses vary in extent, 
but also that the impact on customer value will depend in part on employee and manager 
perceptions of CSR, perceptions among other stakeholders such as supply chain partners 
and investors, and the company’s ‘social credibility’ – essentially whether its history and 
actions mean that its social intentions are interpreted positively by different stakeholders. 
The framework assists in identifying the linkages between CSR and customer value.
17.7.1 Company CSR responses
It is clear that companies differ substantially in their stance on corporate social responsibil-
ity and ethical behaviour initiatives (Pohle and Hittner, 2008). Variation includes both the 
extent and direction of response – how much they change their behaviour and in what ways.