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Impact of corporate citizenship in Decision Making
Introduction
Corporate citizenship can be defined as moral and personal beliefs that affect how decisions are made. The concept involves the integration of ethics and social responsibility in business or in any other area under study. Corporate citizenship has been growing a lot of eyebrows lately because there are plenty of socially responsible consumers out there who would like see that these elements are part of the goods or services purchased (UDEL, 2007)
During 2006, was one of the most serious attempts to include corporate responsibility in the decisions of consumers. There was a campaign called 'network products "whose goal was to sell certain products such as American Express, Giorgio Armani and Gap clothing. All proceeds obtained from the campaign were to be sent from the Global Fund uses its income to address the problems faced by countries world's poor as tuberculosis, malaria, etc. There was very noble intentions behind the idea and consumers would benefit from the purchase of designer prices affordable as the community at large would also benefit from the aid. But the results were in contradiction with the rather heavy expectations. There were no benefits obtained as the sales recorded were very low. It seems that companies were missing something because it stems from the results that consumers do not care about their coz nobles even though one of the most famous rock artists had been invited to perform there, Bon Jovi of the band U2.
This revelation has shown there are some underlying issues that must be addressed by companies when considering corporate citizenship as an issue that affects buyer behavior. When Consumers were asked about their views on corporate citizenship, which quite easily affirm their commitment to the purchase of goods or services that are socially responsible. However, in practice, this is not what happens is that most companies' attempts to engage consumers have failed miserably. So they need to address the question whether consumers really the public value of the company and if so, how can it be incorporated into the day date the decisions of various enterprises.
How corporate citizenship and decision making can be combined
Citizenship corporate among consumers is usually displayed in two ways;
- opinions through
- through behavior
The opinions are generally the preferences of consumers say they have when asked about his feelings towards companies social responsibility, while the behavior measured by the outcome of this opinion. Activity that is synonymous of behavior is usually lower than the views expressed.
There were numerous examples of these differences in recent years. For example Starbucks Corporation introduced a new brand of fair trade coffee in 2001, but this brand has been very poor performance. The indication of these are usually topped by low percentages socially responsible brands in most markets are. Research has shown that most products that integrate ethics and social norms usually represent 1-2% of the total market share as consumers are often reluctant to buy them. (Grant, 2005)
corporate citizenship has also shown few practical results through some of the statistics reported in the past. Consumers disregard ethical standards when they purchase counterfeit products. In 2006, economist showed that China has made about three billion dollars through the sale of pirated DVDs at the same time, only two hundred and seventy U.S. dollars million had been made for the purchase of genuine films. If the same consumers held the belief that there must be corporate citizenship, then would have had respect for private property and would not have bought a counterfeit.
Abundance surveys have been conducted that indicate otherwise. During 2005, there was a study by the Institute of Global Markets which discovered that three elements of citizenship receive corporate attention of fifty-four percent of consumers were. Some of these include;
- fair trade products
- organic products
- environmentally friendly products
The surveys were conducted in many parts of the world including USA, United Kingdom, Australia and parts of Asia. Another opinion poll conducted by Market and Opinion Research found that nearly thirty percent of consumers in the United Kingdom is like to see more ethical aspects included in the manufacture and sale of products or services. (McGahan, 2004)
The numbers show that consumers are saying one thing and doing another. As they say, are unwilling to put their money where their mouth is. Most consumers see ads about behavior irresponsible and vow not to use the product, but when they go to malls or shops, still end up buying these items. The truth of the matter Consumers always settle for the cheaper item. Most of these products or services that have ethical connotations they often cost more than the alternatives. So that there is a need to address the underlying issues behind this behavior. Two reasons could be the cause of these marked differences between word of mouth and behavior practical. Consumers need to be better informed about the importance of corporate citizenship. Besides that, companies must incorporate approaches of citizenship corporate giving results
Studies have been done to measure the impact of corporate citizenship in consumer purchases. One of these companies chose six countries to investigate. There were two aspects of corporate citizenship, which is the aspect of the manufacturing environment and appearance. The company measures the performance of consumer in relation to mercury batteries and shoes. The latter focused on the environment while in athletic shoes focused on manufacturing practices, which had been made by child labor in a distant country. It was found that when consumers were given all relevant information about the two products that is, its features, functions and features socially responsible with them, only a small percentage could recall the issues corporate responsibility. The majority of consumers could recall what the product is equipped had, for example, how sneakers have become with an absorbent lining for comfort and absorption purposes. But most of them could not remember the sneakers had been made by working children. This indicates that even when consumers have become socially conscious, simply chose to ignore the facts and went ahead to purchase the items. Prices, brands and features were the important things that consumers consider. Some of the features incorporated in this research included, (UDEL, 2007)
Athletic shoes
AA batteries
Social attributes
Does child labor, while making shoes?
Is there any recyclable materials in the battery?
Do workers receive a minimum wage for their work?
Are mercury-cadmium batteries?
If conditions in the industry acceptable?
Packages are recyclable?
Do workers are union members?
Make batteries generate hazardous waste in the production process?
Are there safety information during the elimination?
Functional attributes
shock absorption properties
Storage life
Support ankle
Useful life
weight
Price
Sole durability
Mark
Manufacturing material
Rechargeable
price
Money back guarantee
Shoe's mark
Expiration Date
Ventilation
Tester
Country of origin
Country of origin
Similarly, the investigation was conducted by Amnesty International in Hong Kong and Australia. Students were asked to recall the elements of corporate citizenship on certain products and only five were able to do this. The rest simply focused on the functional characteristics that would benefit directly. The findings indicate that even when consumers have sufficient information to continue the principles of corporate citizenship, has not followed that line. What is not the facts and continue buying the products being considered corporately irresponsible. (McGahan, 2004)
Relevance of corporate citizenship
One must wonder what corporate citizenship has a role to play in the decision making process of consumers and if so what can be done. An investigation was conducted by the Group's Corporate Social Responsibility. They did research through discrete choice model. In this case, consumer behavior is measured by actions, not opinions. They measured the number of people who have purchased items that were considered socially responsible. Was achieved by informing consumers about all aspects related to specific products, the effect of this information is measured through purchases. It was found that there are some consumers who have corporate citizenship very seriously. But their numbers is minimal and is hard to predict what kind of form coming demographic group. There are socially responsible members among the Korean, Australian, Spanish and people in Turkey. The elements that cut across age, gender or education level. Many surveys carried out previously to the contrary, highlights corporate citizenship as a very important factor in consumer decision making, but these are not the same results obtained when more practical purchases that opinions are measured.
The group doing the research created products that do not have equal levels of certain important characteristics. Some products have a good functional attributes, but very low social attributes, while others the opposite. They found that only ten percent of the research people purchased the items with the social good but poor functional attributes. At the same time, it was found that fifty percent of the purchases were for items that had poor social attributes but has good condition. (Grant, 2005)
However, even those who were regarded as socially responsible only put the quality of the second. In real-life scenarios, consumers who value corporate citizenship first consider the usability of the product, so if that has been careful, you can choose a product who had become socially responsible ways if there is a choice between them and one that does not have those qualities. Therefore, we can say that it is difficult to find a consumer will consider corporate citizenship as the only element in the purchase of products. This only consider the combination of ions with product quality.
Corporate citizenship among the peoples of the world
A research they interviewed people about the kind of perceptions that they had towards corporate citizenship in various countries worldwide are classified into three different areas
- realistic development
- social dependence
- economic rationalism
It was found that most people who come form China, Turkey and other parts of Asia attributes his lack of interest in corporate citizenship objectives of economic development. (Realism of Development) There was a Turk who was quoted as saying that he did not care to adhere to strict labor laws because all that mattered was that he made money for their boss and his boss gave him some of those benefits. Most people in Asian countries argue that they are too poor to give priority to issues such as ethics and social responsibility of business. They are just looking for a way to make money and to purchase items at an affordable price. (UDEL, 2007)
People in the United States, Australia and some parts of Spain were mostly found in possession of quality economic rationalism. Most of them argued that the reason that did not accord corporate citizenship while shopping was because they thought that all the goods you buy must be business. They believe that no matter how strong a sense of citizenship were the business and ethical issues, not worth paying more for it during your shopping. There was one consumer who said he was aware that some employees Nike were working under poor labor laws. But the American admitted that all other companies are doing the same and not worth sacrificing for him a perfect shoe for that kick. I thought Nike was just trying to resist the pressures in the footwear manufacturing industry, for if not to incorporate this aspect in its manufacture then most people would have to pay more for their products and are out of competition by rivals.
The Swedes and the Germans were to represent the elements of social dependence. Most of them considered that corporate citizenship will not affect them directly. Instead, lay the blame on their government. One respondent was reported saying that he is unable to do anything about why, if it considers as a priority. Most people believe that the government should be to address issues of ethics during the manufacture and sale of products. They believe that their responsibility is simply too meet their own needs while the government takes care of the rest.
What can companies do to incorporate these findings
Research and the results shown above can be used by administrators to take an attitude of commitment and focus in the promotion of consumer behavior. There are five things that need to be made by these directors;
- social issues to choose wisely
- not based on single surveys
- combine social responsibility function
- communicate issues of social responsibility to consumers as
- Manufacturer of consumer ready change
Choose wisely social problems
Most managers simply do not do their homework when is selected aspects of corporate responsibility that will be incorporated into products and services. Topics chosen should have very similar or related to the product Deals. We must also deal with a problem at a time, for example, offering recyclable packaging or offering only part of the proceeds from the sale of a product just coz charity. (McGahan, 2004)
an example of a campaign that does not adhere to these principles was the Live 8 concert. Was conducted in order to help those who may be suffering from AIDS, global poverty and debt. This campaign did not do very well because there was little or no relation to the issues addressed to the music. Also that, they wanted to face many problems at once and turned against it.
Do not rely on surveys alone
It is very important for business managers and other stakeholders to ensure that the type of corporate citizenship means chosen will produce results. Contrary to what the people think, consumer surveys do not always represent the truth. It costs the consumer nothing to lie. Most of them can claim the attention to their surroundings or around a charity coz some answers, but they seem to socially responsible consumers, but may not necessarily be the truth of the matter. (Grant, 2005)
Companies must measure consumer preference rather than by the companies responsible for the goods in practice. One company that implemented this strategy was that of The Home Depot company which sells timber. The company informed its customers that some of the wood he sold had been certified by the Forest Stewardship Council. They ascertained that the wood was not the forests that grow old. It raised the price of wood by two percent and found positive responses to it. About thirty-four percent of consumers felt that this was socially responsible and went on to purchase the item. Home Depot used those results to measure in which aspects of corporate responsibility to other stores of their own.
Join social responsibility function
Managers should always remember that most of the items consumers purchase in order to meet a certain need or want. The business aspect of citizenship only comes when the client believes that the property being purchased will meet their needs. In this sense, social responsibility will only be useful as a bonus to a product well done. Companies must ensure that they confuse the two concepts. Corporate citizenship only work for a company when they show a clear relationship between both. For example, the 'net product "campaign mentioned above did not do very well because people could not see the connection between Giorgio suits Armani and conquer AIDS. (McGahan, 2 004)
A firm that merged these two concepts are Body Shop, who were trying to start a campaign against animal testing through the picture of beauty as a futile effort. This project was a success because there was no clear link between two aspects of social responsibility and function.
Communicating the issues of social responsibility to consumers either
The Companies must understand that consumers have little knowledge about corporate citizenship. It's up to them to tell customers about these issues in the languages that are related with them. People acquire knowledge and interpret it in terms of its cultural institutions. Companies should only deal with issues of citizenship corporate can be understood by consumers in a given area. For example, in countries where there is great concern for child labor, managers must take this matter up. They should not seek to address the issues of labor rights, wages and unionization in that the most urgent work child.
Since China is known for counterfeiting, a campaign in this country should be totally different from one made in a country like the U.S. or in Europe. Corporate issues should be at that location. (Grant, 2005)
Make the consumer willing to change
Companies must put in mind that it is their responsibility to consumers concerned about the charity and social issues. They must market the product, so as to describe the benefits of the product and then bring social elements s an afterthought. For example, in the sale of energy meters, consumers were informed about technological benefits that would bring energy meters and then later told them abut the effect of such purchases for the environment and the total consumption energy in the country. In this sense, consumers were convinced that this product would help them while at the same time have some benefits for the environment.
Conclusion
Corporate citizenship is a concept that may be common in some members of society, although may be absent in others. It is for the companies to ensure that the asses the motivating factors behind corporate citizenship. They must realize that polls mass do not always represent the truth. It is crucial for a company determined to relate the views of consumer behavior then arrive at a strategy to capture those sales. Corporate citizenship brings the best results when it is tied with functional value for the customer. As much as a consumer feels that the public value of the company, not going to sacrifice this for a lower quality is not meet their needs. (UDEL, 2007)
Reference
UDEL (2007): Understanding consumer behavior; Retrieved from href = "http://www.udel.edu/alex/chapt6.html"> http://www.udel.edu/alex/chapt6.html consulted on December 7, 2007
Grant, RM (2005): Analysis of marketing and marketing strategy; Blackwell Publishing Ltd., Oxford (United Kingdom)
McGahan, A. (2004): How Industries Evolve – Principles for achieving and sustaining Superior Performance. "Harvard Business School Press, Boston,
About the Author
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Grant MacEwan University – Athletics Department, Edmonton