CSR - Building Reputational Capital

[Karl]

By Salman Haider, The New Nation, Bangladesh – July 15, 2008

Great brands meet or exceed consumer expectations. This has always been true. But as the marketplace has gotten more sophisticated and competitive, marketers have realized that what motivates people to buy products is far more complex today. It is not just function, efficacy, or availability. Nor is it simply price or positioning. It is a host of contacts, impressions and emotional connections, along with function, that drive consumer behavior.

We call this 360 Degree Branding. In our experience, everything that touches the consumer creates the brand: from style and design, to packaging, news coverage, delivery trucks and service experience. Everything from hearsay to history counts. To market in Bangladesh, in fact, is to enter a social contract. What's new is that this social contract is rapidly moving beyond the promise to make good things and provide reliable service. Nowadays, customer expectations encompass other areas of corporate responsibility, such as safety and health issues, environmental practices, and labour relations. Clearly, this moves brand building beyond just typical marketing. It entails taking responsibility for the way your entire business affects society, and understanding, in turn, that the fate of your brand can depend on people who may not use your products or services at all-stakeholders as diverse as government officials and regulators, analysts and editors, NGOs and activists, community and religious leaders. Recognizing that a meaningful, coherent and cost-effective corporate social responsibility (CSR) program is a branding exercise may be entirely new in Bangladesh.

We believe that branding and CSR have been on parallel, but separate tracks in Bangladesh. There are explanations for this. Many executives in the region equate branding with selling. They are understandably, and often rightly, reluctant to trumpet good works or exploit marketing programs with social agendas. Moreover, much corporate philanthropy has traditionally been associated with company founders and generally based on the sort of close-knit relationships that characterize Bangladesh's family-controlled corporations. Considering branding and social responsibility as separate activities not only misses the point, it is missed opportunity. In a 360 degree world, where everything counts, branding activity and corporate behavior are already intertwined in the minds of the stakeholders and consumers-and they should be.

In 2005, Executive Times and Standard Chartered Bank has initiated "CSR Award". Many companies both local and multinational have come forward to get the Award. Today, the companies are more aggressive towards CSR to establish brand image for sustainable business growth. Companies are facing the challenges of adapting effectively to the changing environment in the context of globalization and in particular in the export sector. Although Consumer Rights Movement, enforcement of government regulations and a structured view regarding the economic importance of CRS are not yet so widespread in the corporate world in Bangladesh, companies have gradually attaching more importance to CSR in the local market as well. They are increasingly aware that CSR can be of direct economic value. Companies can contribute to social and environmental objectives, through integrating CSR as a strategic investment into their core business strategy, management instruments and operations. This is an investment, not a cost, much like quality management. So, business organizations can thereby have an inclusive financial, commercial and social approach, leading to a long term strategy minimizing risks linked to uncertainty.

The benefits of CSR include building a positive image and encouraging social involvement of employees, which in turn develops a sense of loyalty to the company. CSR activities help bond employees as a team, and with the organisation, which in turn helps create a dedicated workforce that is proud of its employer. However, one of the biggest advantages of such activities is the development of internal branding among employees. "Employees feel a sense of pride when they are involved in such activities which in turn help in retaining them. Similarly, such activities also in a small way contribute towards image building," says Bharti Das Gupta, Advisor, Social Initiatives and Managing Trustee of Catalyst for Social Action (CSA), Kale Consultants. Besides, with hectic work schedules, these activities help in de-stressing many employees and help in developing more evolved and conscientious human beings.

In fact, CSR means different things to different people. However, certain ideas are becoming commonly accepted. One is that CSR is not about philanthropy or charitable work. It refers to something much more fundamental. It is about how companies take responsibility for their actions in the world at large. Conventional CSR Watchdogs include Labor Unions, Consumer Groups, Environmentalists, NGOs and all 'Stakeholders' watching over their interest as opposed to 'Stockholders' only. In essence, CSR is positive rapport with the society. In a Bangladesh context, several multinational companies and local companies practice CSR. Most of the business concerns in Bangladesh do not rate high in practicing CSR unless being pressured by the foreign buyers in case of export oriented business. CSR in Bangladesh can also contribute a lot to community development. The corporate house can develop the community by creating employment, providing primary education, contribution to infrastructure development like road and high-ways and addressing environmental concerns. This is more relevant for a country like Bangladesh where the government interventions in these fields being augmented by corporate alliance can go a long way in developing the economy, society and environment.

Source: The New Nation - Internet Edition