Doing good with an effective social enterprise strategy.
by Phoebe Harpham
In today’s global world, companies can no longer distance themselves from the economic inequalities and social and environmental problems of society. With consumers more connected, informed and discerning than ever before, there is a greater expectation for businesses to do more than simply create wealth for their shareholders. As such, more and more businesses are looking for ways to contribute back to society through Corporate Social Responsibility (CSR) initiatives and Social Enterprise. All this is well and good, but are there really any benefits for businesses in ‘doing good’?
‘It depends’ is the answer provided by academic Bhattacharya, Dean of International Relations at the European School of Management and Technology. Bhattacharya has been researching stakeholders perceptions of CSR for the past two decades and believes that not only is it possible for companies to ‘do well’ out of ‘doing good’ but that it is essential for companies to ‘do good’ to gain market advantage. However, he stresses that companies must adhere to a few golden rules if they are to reap the benefits of CSR.
Firstly, communication is key. It is important for companies to let consumers know about their CSR initiatives or else they are likely to go unnoticed and unrewarded. Interestingly, Bhattacharya’s research found that even in companies with the best managed CSR initiatives, consumer and employee awareness was still very low. These findings make a strong case for companies to improve their internal and external CSR communication strategies.
Secondly, outputs matter more than inputs when communicating with stakeholders. Consumers are more interested in how many children were educated for example, or how many lives were saved, rather than how much money, time and resources a company invested into an initiative. Consumers want clear proof that a company’s CSR initiatives are effective and making real change in the world.
Thirdly, and arguably most importantly, there must be a good ‘fit’ between the company and the cause. Companies should look to support causes that align with their philosophy and that of their consumers. An effective CSR strategy should start with a company understanding what causes resonate with their stakeholders, rather than the traditional top-down CEO led approach that has characterised CSR initiatives until late. This points to a clear need for companies to conduct market research into their stakeholder CSR preferences before they initiate a CSR strategy.
Companies would do well to consider these factors when establishing their CSR strategy as the rewards of effective CSR are rich. Among such benefits are: increased employee morale and retention, resilience, brand loyalty and positive word of mouth. However, Bhattacharya insists that without a quality product or service, no amount of ‘doing good’ will influence consumer choice. In other words, there are no shortcuts for companies to create business value through CSR.
So, back to our initial question, does it pay for businesses to ‘do good’? Well it appears that the answer is ‘yes’, but as with most things in life, this depends on the level of genuine commitment that companies invest in CSR. Surface engagement and token gestures of goodwill may have been enough to sway consumer choice a decade ago, but are no longer enough to influence the savvy consumers of the 21st century.
Find out how One Health Organisation can assist your company develop an effective Social Enterprise Strategy.