Corporate social responsibility: mitigating reputation risk in a crisis
By Craig on Nov 19, 2009 in Corporate social responsibility, Issues & crisis management, Public relations, Social media, Strategic communication
An organisation needs to understand the core values of its stakeholders and customise communication
processes in respect of, and in response to, those values, asserted Rupert Hugh-Jones (right-below) from Scaffidi Hugh-Jones at Frocomm’s Crisis Communication & Social Media Summit 2009. This assertion was made in the context of crisis communication, but it could equally be applied to all aspects of an organisation, both communication and non-communication related.
This perspective is a manifestation of the guiding principle of strategic public relations, two-way symmetrical communication, where organisational perspectives, processes and, yes, values, do not come about in isolation to stakeholders, but through an organic, mutually respectful process.
The responsibility of business
Craig Badings, of Cannings (right-below), took the same approach in his presentation at the summit. Craig wielded the hatchet to Milton Friedman’s dictum of “The business of business is business…” Craig said, “This no longer cuts it. Companies know this, the public knows it and so do NGOs, regulators and government.
“This is the era of the ethical consumer,” Craig continued. There is nowhere for organisations to hide. This reinforces the responsibility that public relations practitioners have to influence organisational behaviour. This will help organisations develop more mutually beneficial relationships with their stakeholders, at the same time impacting positively on society.
Craig posed the question, can CSR or thought leadership lessen the impact of a crisis or lead to a faster recovery? He asserted that these days companies are not only, “expected to come up with products that are good for the bottom line, they also need to be good for society.”
CSR, of course, is fundamentally about aligning an organisation with society and stakeholder expectations. Operating at its optimum level, it is not ‘bolt-on’, it is fully integrated and part of the organisational culture, as SR|7’s James Griffin implied at the summit. Being socially responsible, then, is just about the best form of reputation enhancement and crisis preparedness that an organisation can undertake.
“CSR in the truest sense is about conducting a thorough risk analysis and aligning programs with your company values that best mitigate those risks in a collaborative a manner as possible,” said Craig. Integrating CSR within the values of the business, as Rupert also implied was necessary, enhances the integrity of the organisation and its approach to business.
Reputation matters – financially
Craig discussed the findings of the Reputation Index, which corroborates that, “a well-regarded company is more likely to be trusted, liked, admired and esteemed than others – all strong mitigating factors when a crisis hits and all likely to afford you, for a while at least, the benefit of the doubt.”
Importantly, Craig provided data that strongly suggests organisations with an enhanced reputation withstand crises markedly better than those that do not have a good reputation. There are also plenty of academic studies supporting this assertion.
The drivers behind CSR adoption
The dialectic that determines why organisations adopt CSR is an interesting one. As Craig pointed out, it is not unusual for the ‘adoption’ to be driven by a desire to placate stakeholders, rather than be truly aligned with the way a business operates or its values. Philanthropy does not = social responsibility or true two-way symmetrical communication. It is a superficial gesture, no matter how big the handout. Giving money to a worthy cause hardly mitigates the fact that you might be slashing rainforests and paying workers a pittance so that you make enough money for the hand out.
Similarly, producing a flashy CSR report (printed on recycled paper…) does not constitute social responsibility.
However, if the reporting and the philanthropy help peel the scales from the organisation’s eyes as to the benefit and payoff in CSR, then who cares? It has a purpose. Sometimes, the cart does come before the horse.
A further extension of this is an organisation’s use of social media. Utilising social media implies an organisation is applying a CSR/two-way symmetrical communication approach because social media means it is…
- listening, talking to and trying to understand its stakeholders (or is it?)
- open to altering its processes, products, services, behaviours and approaches to stakeholder engagement, so it is more in line with stakeholder needs and wants (or does it?).
The answer to both questions is no. But if the use of social media means some of those stakeholder messages are filtering their way up to the boardroom…then maybe, just maybe, that social responsibility will come.
CSR and public relations
CSR, then, is really public relations operating at its most strategic level, applying the methodology of two-way symmetrical communication. This is clearly an excellent way of minimising the likelihood of a reputational crisis impacting on an organisation as well as minimising the impact of a crisis when it does occur.
How do you feel about the parallels that are drawn in this post between public relations and CSR? What is the public relations professional’s role in encouraging an organisation to be socially responsible? Do you have examples of CSR in business ‘doing good’? And this could mean financially (for the organisation), socially or in another dimension.
This post is part of an extended series covering the summit. All the coverage is also available in a free PDF report that you are welcome to share with your colleagues and peers. As a return favour for providing this resource, and only – of course – if you think the content is worthwhile, perhaps you could tweet about it or flag it on one of your social media networking sites, such as LinkedIn.




Craig, the business of business HAS to be business, or there is nothing to put in the CSR budget pocket. The responsibility to the owners (shareholders) of the business is a legal distinction. If you can state to the stockholder that CSR activities help the business operate effectively, then you’re on solid footing. But this apparent paradox is a grave concern for many companies. If your firm is suffering in the recession, with lower revenue and poor financial results, you need to direct investment toward the items most likely to help you work through the downturn. That may involve reducing CSR budgets. The halo effect helps you in some ways, but don’t be surprised as such investment falls along with revenue.
Sean Williams | Nov 20, 2009 | Reply
Sean, that’s why the debate is so fertile, there will always be another opinion on this and Friedman’s quote has been debated for years. The problem I have with it is its black and white nature. Today the boundaries have blurred and I would challenge any business to survive remaining focused solely on its business with scant regard for the current environmental, social and political milieu in which it operates.
Cheers
Craig B
Craig Badings | Nov 20, 2009 | Reply
Great Post – thanks!
As Craig said, there are many options. One is technology to reduce the cost of using social media to listen in on what people are saying about your company and products.
Reputation Analytics, as we call this new form of software, monitors blogs, tweets, Facebook, news feeds, etc, searching for mentions of a word or phrase. Natural Language capabilities assess the sentiment: positive or negative? The report states (among a host of options) numbers of mentions, ranked by their authority (this site’s reputation by numbers of readers). This allows you to concentrate your attention on the sites of importance at that moment. A trusted site is suddenly negative about one of your products? Begin a dialogue immediately by commenting on the site, and emailing the blogger to begin the conversation.
These automated approaches reduce the time needed to participate in the social media space to about an hour a day – a task which can be spread amongst all your CSRs, and thus be achieved with no increase in people costs.
Social media, monitored in this way, and then responded to by participating in the conversation (blogging, commenting on other blogs, online forums and groups) provides a feedback loop between a company and its clients. It creates a community.
This feedback loop is the ultimate form of Customer Service: it allows the customer to drive product design.
Our website (www.inbound-marketing-automation.ca) provides an overview of these ideas, and our blog describes how customers can participate in the product design process via these new Inbound techniques.
Eric Goldman | Nov 20, 2009 | Reply