The influence of Corporate Social Responsibility (CSR) on Corporate Communication

Table of Content

1 Introduction

2 Theoretical background
2.1 Corporate Communication
2.2 The concept of Corporate Social Responsibility – Theoretical background and definition
2.3 Different stakeholder groups in the global market

3 Impact of CSR on content and media of corporate communication
3.1 Impact of CSR on content of corporate communication
3.2 Impact of CSR on media of corporate communication

4 Consideration of CSR in the Communication Strategy

5 Reflection and outlook

6 List of References

Table of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1 Introduction

In the last decade, the topic of Corporate Social Responsibility (CSR) has become an important issue for many companies and organizations worldwide.

Many multinational companies and organizations demonstrate their social responsibility by taking appropriate action. Companies as well as organizations get increasingly involved in CSR through ecological and social projects like charity events or the support of organizations like UNICEF or the Red Cross.

Many organizations and companies also demonstrate their commitment through the membership of the Global Compact or other initiatives, by weighing in advance their environmental impact of their foreign operations or by ensuring that their overseas activities are contributing to poverty alleviation in the areas where they are established.¹

Corporate Social Responsibility has an incredible impact on the overall performance of companies – assists their financial stability, promotes profits empowers skilled employees, increases access to Investment and capital. The implementation of CSR concepts requires companies and organizations to behave lawfully, reducing the risk of sanctions and helping to open and retain loyal customers.²

CSR has consequently become an integral part of the corporate communication and is applied at different levels in relation to different stakeholder groups, since multinational companies and organizations increasingly communicate their corporate social responsibility activities.^{3 4}

As a result, corporate communication is affected by the CSR activities of a company and should be taken into consideration in the communication strategy of companies or organizations.

Therefore, the term paper discusses in which ways the considerations of CSR affect the content and media of corporate communication with different stakeholder groups in the global market. Besides that, the term paper describes and discusses how companies and organizations should take CSR into consideration in their communication strategy.

2 Theoretical background

2.1 Corporate Communication

Organizations and companies of all sizes and sectors must find a way to successfully establish relationships with their relevant stakeholders. The management function is responsible for this task within an organization or company is corporate communication.⁵ According to the Author J.P. Cornelissen corporate communication is a management function that offers a framework for the effective coordination of all internal and external communication with the overall purpose of establishing and maintaining favorable reputations with stakeholder groups upon which the organization is dependen t.⁶

The authors Illia and Balmer identified corporate communication as a management function with three main objectives. According to Illia and Balmer, Corporate communication is seen to be important in terms of maintaining favorable inter-organizational relationships with groups upon which the company is dependent. Besides that, the authors highlight the relevance of corporate communication to evaluate social trends and formulating corporate policies that can help the company innovate and proactively adapt to changes in society. The third objective is the integration of all communications under one unique strategy so to support marketing activities. Illia and Balmer also state that corporate communication represents the nexus between the corporate identity and corporate reputation.⁷

2.2 The concept of Corporate Social Responsibility – Theoretical background and definition

The concept of Corporate Social Responsibility (CSR) has no generally accepted definition, since Corporate Social Responsibility covers a broad field of scientific research with a multitude of different, partly competing definitions and concepts. Neither in science nor in business practice is consistent and unequivocal clarified how the term Corporate Social Responsibility can be clearly defined.⁸

Basically, the topic of CSR is founded on the simple idea that companies have certain obligations to society even beyond mere profit margins. Relatively widespread and established as a common understanding in the European area are the CSR definitions of the European Commission from 2001 and 2002.⁹ According to the European Commission “CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.” ¹⁰

The most current definition is provided by ISO (International Organization for Standardization) with ISO 26000.

According to ISO 26000 Corporate Social Responsibility can be understood as "The responsibility of an organization for the impacts of its decision and activities on society and the environment, through transparency and ethical behavior that: ^[11]

- Contribute to sustainable development, including health and welfare of society
- Takes into account the expectation of stakeholders
- Is in compliance with applicable law and consistent with international norms of behavior and
- Is integrated throughout the organization and practices in its relationship”

Based on today's knowledge and development status, the following fundamental characteristics of CSR can be derived from these two views:¹²

- CSR should contribute to the sustainable development of society,
- CSR goes beyond legal obligations, is therefore voluntary and serves the long-term interests of companies,
- CSR includes the mandatory observance of laws and the required observance of international norms and standards (compliance),
- CSR is not an additional task, but part of the company-wide management and leadership task,
- CSR requires the involvement and consideration of the interests of stakeholders

2.3 Different stakeholder groups in the global market

The consideration and the involvement of relevant stakeholders is essential if we talk about CSR and corporate communication. Edward R. Freeman defined stakeholder as “any group or individual who can affect or is affected by the achievement of the organization’s purpose and objectives.”¹³ Stakeholders can be divided in different types or groups.

A well-known categorization for the segmentation of stakeholders is the division of stakeholders in primary and secondary stakeholders according to Max B.E. Clarkson.

A primary stakeholder group is one that is important for financial transactions and necessary for the organization to survive. Primary stakeholder groups are typically comprised of investors and shareholders, employees, customers, suppliers and the public stakeholder group like governments and communities. Between the organization and the primary stakeholder group exists a high level of interdependence.

If any primary stakeholder group is not satisfied with the organization anymore and withdraws from the corporate system, the organization will be seriously damaged or unable to continue as a going system. This underlines the importance of the primary stakeholder group.

Secondary stakeholder groups affect the corporation or are affected by it, but they are not engaged in financial transactions with the corporation and are not essential for the survival.¹⁴

Secondary stakeholder groups include competition, media, trade associations, and support groups (special interest).¹⁵ Secondary stakeholder groups can also be surrogate representatives for interests that cannot represent themselves like future generations or the natural environment.¹⁶ Although the firm is not dependent upon these groups for their survival, they can cause significant disruption to the corporation.

Stakeholder groups are highly important for corporations. The success of a corporation depends upon the ability of its managers to create sufficient wealth, value or satisfaction for the different stakeholder groups.¹⁷

In the last years, the importance of engaging with stakeholders for a long-term value creation increased. The perspective focuses more on developing a long-term mutual relationship rather than simply focusing on profit. Companies need therefore to engage frequently with a variety of stakeholders upon whom dependence is crucial.

The interaction between the stakeholders and the company moved from a focus on stakeholders being managed by companies to a focus on the interaction that companies have with their stakeholders based on a relational and process-oriented view. Therefore, managers and companies are far more interested to understand how they can manage the relationships with their stakeholders, which also influences the way they communicate with them.¹⁸

3 Impact of CSR on content and media of corporate communication

The communication of the CSR activities of a company or organization is crucial for the overall perception of their Corporate Social Responsibility in the global market.

It is important for multinational companies and organizations to take CSR into consideration and to integrate it in their corporate communication.¹⁹ Companies and organizations should be aware that the consideration of CSR influences the content as well as the media of corporate communication.

3.1 Impact of CSR on content of corporate communication

The goal of communication about CSR activities is to represent a company or organization as ethical, socially responsible and open.

The communication about planned and implemented CSR practices helps to legitimize the company as socially responsible to its key stakeholders and the society as a whole and is important to ensure the support for the implementation of CSR practices by different internal and external stakeholders.

Corporate communication within the framework of CSR faces special challenges: An ever more critical public expects from the companies or organizations a correct, comprehensible and target group appropriate communication of their CSR activities. The complex stakeholder relationships demand individual communication messages and differentiated communication channels and the increasing diversity of the of the subject areas within CSR also implies an orientation to the needs of the individual stakeholder groups. These special challenges influence the content of CSR and corporate communication.

The communication of social responsibility refers to thematic blocks as environmental and social reports, volunteering, safety, production methods and trade relations. Companies and organizations are therefore faced with the challenge of sensibly managing the complex content of CSR and to communicate the thematic blocks as an overarching CSR orientation. With the changing roles in communication between stakeholders and companies in the context of new media, where media are no longer owned, and content is no longer offered or supplied, but far more co-created in an interactive community the communication of CSR becomes even more sensitive to public response and merits increased diligence. CSR Communications thus involves much more than producing and promoting an ethical claim because of the complex groundwork that is required.

With regard to external communication, companies and organizations face greater demands for detailed information about the social and environmental impacts of their activities. In response to these increasing demands for transparency, many companies and organizations publish information about the fulfillment of their responsibilities to stakeholders. This includes annual reports that provide nonfinancial information and separate reports on the social and environmental activities. Companies and organizations publish these reports even though there is no obligation for them to do so. Sustainability, social or ecological responsibility or the community engagement of companies and organizations is therefore also content that is included into the corporate communication.^{20 21 22}

CSR Communications is more challenging than other corporate communication responsibilities, as the stakeholder here can more easily check up on CSR programs while interacting with employees in customer contact and dialogue situations. Due to the sensitivity of the topic, as well as the significance of credibility and trust, it is crucial that companies and organizations avoid contradiction and ambiguity when communicating their CSR activities. Aggressive as well as deceptive communications of CSR programs run the risk of criticism especially if the promoted claims do not correspond with the actions of a company or organization.

Moreover, a multinational company or organization should take into account in their corporate communication the diversity of CSR topics and relevance for individual stakeholders. One of the main challenges of CSR communication is the handling of the various interests of the different stakeholder groups. Therefore, the target group affinity of the communication messages is an important aspect for the communication of CSR activities. Reports on occupational safety are for example more interesting for employees and investors. Reports on environmental issues for the public, the local community and the public.^{23 24}

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¹ Cf. Brunner et al. (2018), pp. 464

² Cf. Dimitrova (2019), p. 221

³ Cf. Brunner et al. (2018), pp. 464

⁴ Cf. Maude (2011), p. 33

⁵ Cf. Cornelissen (2014), p.15

⁶ Cornelissen (2014), p.5

⁷ Cf. Illia / Balmer (2012), p. 418

⁸ Cf. Beschorner/Schank (2012), p. 155

⁹ Cf. Mildenberger et al. (2008), p. 108

¹⁰ European Commission (2002), p. 347

¹¹ Bundesministerium für Arbeit und Soziales (2011), p. 11

¹² Cf. Kettler/Kleinfeld (2019)

¹³ Freeman (1984), p. 46

¹⁴ Cf. Clarkson (1995), pp. 106-108

¹⁵ Cf. Benn et al. (2016), p.2

¹⁶ Cf. Stakeholder Research Associates Canada (2005), pp. 11-13

¹⁷ Cf. Clarkson (1995), p. 107

¹⁸ Cf. Morsing / Schultz (2006), pp. 324

¹⁹ Cf. Osburg (2012), p. 469

²⁰ Cf. Osburg (2012), pp. 470-471

²¹ Cf. Maon et al. (2008), p. 22

²² Cf. Bruhn / Zimmermann (2017), p.5

²³ Cf. Osburg (2012), pp. 471-473

²⁴ Cf. Bruhn / Zimmermann (2017), pp. 5-6