- Brands must increasingly undertake uplift programmes that pay back into the business, automatically justifying the continuation and even expansion of the programmes. One prime focus for a brand at a practical level should be working on the brand’s supply chain, improving the productivity, quality and efficiency of upstream suppliers and vendors, and downstream distributors, dealers and retailers.
There is one and only one social responsibility of a business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” – Milton Friedman, September 1970.
Friedman, recognised as one of the greatest economists of the 20th century, was a strong proponent of least government regulation and the free economy, or capitalism. He was awarded the Nobel Prize in Economic Sciences in 1976. On another occasion he said, even more emphatically: “Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.”
Well, if that is not the definitive definition of capitalism, then I don’t know what could be! Fortunately, for the less-privileged and socially or economically marginalised, the Friedman philosophy had its opponents. In fact, long before Friedman declared the pursuit of profit as the sole goal of business, another renowned economist and educator of his times, Howard R. Bowen, wrote in 1953 in his book, Social Responsibilities of the Businessman, that “the obligations of businessmen are to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.”
This is generally regarded as the first espousal of the Corporate Social Responsibility (CSR), although its precursor, philanthropy by successful entrepreneurs, goes way back to the 18th century. In the 19th and 20th centuries, it reached new heights under champions like Harry Boyd Earhart, Henry Ford, Andrew Carnegie, J. Paul Getty and many others.
We define philanthropy as the giving away of money to a cause with no expected benefit in return. With the evolution of branding and the growth of big brands in all sectors, it was inevitable that apart from individual entrepreneurs, brands too would get into the act of ‘giving back to society.’ It can be argued that whereas the largesse of the former was largely out of altruism, the start of financial contributions by brands to charities was perhaps less selfless. Corporate philanthropy was often motivated by a desire to garner publicity, and at times, to satisfy various interests of stakeholder groups. Generally, the commitment remained short-term.
Around the 70s, corporate philanthropy by brands evolved into what came to be known as cause-related marketing. Simply put, cause-related marketing is an (marketing) activity that involves a philanthropic donation by a company or brand to a cause, in such a manner that it supports the company’s marketing objectives. Clearly, an ulterior motive drives such brand support to different causes. Consider marketing campaigns where consumers are urged to buy a particular brand, with the promise that a percentage of the retail price or a specified amount will be donated to a given cause from the price of each unit purchased. As expected, when support to causes becomes so blatantly linked to a sales promotion drive, the credibility of the proposal takes a hit, as consumers either resent this linkage, or doubt that the promised contribution will be made.
Brands must increasingly undertake uplift programmes that pay back into the business, automatically justifying the continuation and even expansion of the programmes. One prime focus for a brand at a practical level should be working on the brand’s supply chain, improving the productivity, quality and efficiency of upstream suppliers and vendors, and downstream distributors, dealers and retailers.
A refinement to corporate giving emerged with the further evolution of corporate philanthropy and cause-related marketing into what is known as corporate social responsibility, although both the understanding and the definition of this term remains generally quite fluid. Whereas initially, support to causes was often occasion focused (for example, during Ramazan, appeals are made for zakat and donations), brands are increasingly identifying themselves with particular causes on a longer or even ongoing basis, incorporating socially-oriented messages within their regular brand communication.
With women arguably the most important segment of buyers (both as consumers and as the main decision-makers of what comes into the home), support to causes such as women empowerment or healthcare are primary fields of focus for brands that target women. For example, for years, Coca-Cola Pakistan has been funding microfinance loans aimed at creating livelihoods for women in partnership with the Kashf Foundation. Similarly, brands like Gul Ahmed and Triumph are long-term supporters of the Pink Ribbon campaign against breast cancer.
Women as decision-makers of what comes into the home constitute the target audience of brands supporting wider family-based issues such as family health. Tetra Pak has organised hundreds of awareness seminars for women, delivered by qualified female nutritionists, focusing on milk consumption as an essential part of the daily diet of the whole family. Dettol’s ‘Sehatmand Gharanay Khushaal Pakistan’ CSR initiative aims to improve health and hygiene within low-income households and empower women to make active choices towards a healthier lifestyle. The initiative specifically targets reducing deaths caused by diarrhoea through a self-sustaining, behaviour-changing model by educating target audiences about improving basic health and hygiene practices and providing them with affordable hygiene products.
The above are examples of brands undertaking sustainable, socio-economic uplift programmes directly relevant to their business; many other brands are involved at a more holistic level in improving society. Education is one such primary sector that is supported by several brands on the perfectly logical premise that an educated society will lead to more significant economic growth. The large number of corporates who regularly support The Citizens Foundation (TCF) is testament to this.
What then is the logical progression for brands for giving back to society? This definition of CSR makes it abundantly clear: CSR is “the commitment of businesses to contribute to sustainable, economic development by working with employees, their families, the local community and society at large, to improve their lives in ways that are good for business and for development.”
In other words, brands must increasingly undertake uplift programmes that pay back into the business, automatically justifying the continuation and even expansion of the programmes. One prime focus for a brand at a practical level should be working on the brand’s supply chain, improving the productivity, quality and efficiency of upstream suppliers and vendors, and downstream distributors, dealers and retailers. As business partners in the supply chain become more efficient and enhance their profitability, the brand benefits from higher quality of inputs, less rejection and better pricing and cost savings – the proverbial win-win for all happy endings. At the holistic level, brands that graduate from part-time philanthropy to year-round structured programmes benefit in other ways too. These include stronger brand positioning, more credible corporate image, increase in market share and sales, higher capability to attract and retain high-performing employees and higher appeal to investors and financial analysts.
Zohare Ali Shariff is CEO, Asiatic Public Relations Network and blogs at www.bobbhai.com.pk