They do this through a number of different channels which include traditional public relations, corporate communications and elements of advertising and marketing. A more recent discipline in the creation of a positive public image has been CSR, or corporate social responsibility reporting. CSR reporting is becoming more and more significant as corporations are increasingly trying to portray themselves as responsible global citizens and at a micro level part of the communities in which they operate.
A whole new CSR industry has sprung up and CSR executives are increasingly becoming involved in varied aspects of internal communications, human resources, public relations, advertising, corporate governance, marketing and corporate communications across all facets of a firm’s operations and in the geographic regions where it does business.
CSR has arisen for a number of reasons.
In some industries there are regulatory reasons why a company has to report its CSR activities, such as in the extractive industries, nuclear industry, chemicals and pharmaceuticals. In others, a corporation has to update its customers on its CSR activity because of the nature of its business, such as registered charities and NGOs.
But in many cases companies used to do CSR reporting as it makes good business sense. But things ar changing now.
This is it: as the developed world has become increasingly consumerist and most of the necessities of life – food, water, heating and shelter – have become a given ‘right’ in these societies, consumers now make lifestyle choices about their purchases, not just necessity purchases.
Other factors become important in the purchase mechanism:
• Health: the rise of highly priced organic foods –> before the mid-twentieth century, almost all foods were organic and almost all of the people in the world grew it themselves out of necessity;
• Service: what is the difference between one high street bank and another? They all offer often the same products, all with very similar rates and features. But now banks compete for custom on ‘service’, hence the millions of dollars they are spending in advertising to create a human, friendly, local face and prove they are not cold financial institutions, but caring, considerate, supportive partners; and
• Status: which explains why Nike or Adidas can get away with selling fundamentally the same shoe as a non-name brand for three times the price. In many cases the Nike and non-brand shoe have been assembled in the same factory in the developing world with the same materials.
• Reputation: this is an increasingly important feature, which is currently conditioning the purchasing behaviour of consumers. Thanks to social networks, their voices can be heard and shared at an incredible pace, impacting directly on a brand and thus making people protagonists of their "living space".
(to be continued)
(written together with John Foster)
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