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We agreed in our last post that PR practitioners are responsible for the client’s/company’s reputation. Though PR pros may not plan every charity event or directly handle customer service complaints, it is our job to build and protect a company’s image. As today’s businesses  look to become more socially responsible, the role of public relations to create corporate social responsibility programs becomes more visible.

Though it’s important for a company to operate ethically, not every organization is driven by charity. Especially when economic times are tough, a company needs to identify what’s important and where they should focus their efforts and funds.  So…

How important is Corporate Social Responsibility?

CHRIS:

After business ethics disasters like Enron and WorldCom, the burden of  earning trust lies with each individual business.  You could be in business to save the lives of third-world puppies with eating disorders, and people would still be skeptical. Thanks to a slew of mistakes by a few bad apples, everyone starts behind the eight-ball in the reputation game, and the court of public opinion is quick to turn on you if you make a mistake.

In this new business environment, both for-profit and non-profit organizations need to build and maintain a good reputation to be successful – and being a socially responsible entity is the first step. Showing that you care about more than just yourself has always been important, but the need to show this will only increase as GenX and GenYers start to take the reins of big business.

AMANDA:

Just because a business appears to be responsible doesn’t mean it is actually doing the “right” thing. Enron appeared to be a model corporate citizen before its collapse, donating hundreds of thousands to philanthropic efforts despite the company’s hidden financial struggles. Appearing to be socially responsible actually helped Enron bilk shareholders out of billions in stock and benefits by maintaining a trustworthy facade.

It is obviously impossible to be certain what an organization’s motives for social responsibility initiatives are. However, even a company with the purest intentions should always put its stakeholders first. This means following through on the organization’s mission statement and ensuring the company’s viability before embarking on initiatives to help others.  If a company doesn’t put its own interests first, it won’t be around to continue helping others.

CHRIS:

I agree that a company must be responsible to its STAKEholders – but these constituencies include more than just SHAREholders. And I disagree that you can’t identify TRUE corporate social responsibility. It’s about actions, not just words. And it’s a necessary part of business in the 21st century.

Programs that are environmentally friendly or charitable ultimately help the company by building trust among employees, customers and business partners. People want to do business with good people. Though the return on CSR expenses may not be reflected on the annual balance sheet, ethical actions are  long-term investments in a company’s reputation that can be appreciate by shareholders and stakeholders alike.

AMANDA:

No doubt a company’s long-term reputation – and perhaps consequently its bottom line – would benefit from investments in social efforts. However, especially in the current economic environment, there are no guarantees on a company’s lifespan. Businesses, like individuals, are feeling pressure to make more budget-friendly decisions. A college student might opt to shop at Wal-Mart even though he believes the corporation is evil. Likewise, a company may need to outsource work with foreign businesses when it would be more socially responsible to stimulate the local economy by working with a more expensive domestic company.

To ensure a business survives, it must look hard at its short-term budget and make changes to establish financial stability. If a company is doing well, it should by all means contribute to the community that is helping it succeed. But a company struggling to stay afloat simply cannot afford to put vital funds into initiatives that won’t result in short-term profit. A company that goes under can no longer contribute to any community causes, so organizations should be careful to make sure their philanthropic efforts don’t put them out of business.

CHRIS:

I’m not saying a for-profit company should abandon its business plan in order to “save the whales.” But I am saying that a company needs to be responsible no matter what its financial situation is. And that means acting ethically even in hard times. Just because the economy is bad doesn’t mean a company can abandoned its principles. And small contributions can still be made – even if this means using company resources to promote employee contributions to charity. United Way campaigns are a perfect example of this.

But I’m wondering what companies have been doing over the last year – and how that’s affected NPOs. Have you cut back charitable contributions in tune with the economy? If so, have you cut all funds? Let us know what you think.

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