A Case for CSR And Ethics

For my Marketing Management and Strategy class I'm reading a textbook entitled Marketing Strategy by O.C. Ferrel and Michael D. Hartline. One of the chapters is on Marketing Ethics and Social Responsibility in Strategic Planning. It lays out the importance of ethics and social responsibility for success in business.

"Firms that choose to take these extra steps concern themselves with increasing their overall impact on society, their local communities, and the environment, with the bottom line of increased goodwill towards the firm, as well as increased profits," writes the authors.

An example in the book is the White Dog Cafe in Philadelphia. Owner Judy Wicks has grown her business from selling coffee and muffins in her home to a restaurant that can seat 200 and grosses $5 million annually. "Wicks pays a living wage to all restaurant employees, even dishwashers; however, most employees at White Dog Cafe make above this amount." What's more is that the restaurant is powered by renewable energy and 10%-20% of profits are donated to White Dog Community Enterprises. This affiliated nonprofit strives to achieve a more socially just and environmentally sustainable local economy in the greater Philadelphia area.

High ethical and responsible standards can benefit firms by attracting employees. A survey conducted by business consulting firm LRN found that 94% of respondents considered it very important to work for an ethical company. And 82% would even take a pay cut to work in an ethical environment.

Corporate Social Responsibility can also benefit companies by increasing employee loyalty. An example where this paid off is for Washington's own Burgerville. It "realized significant cost savings, decreased employee turnover and higher sales after it began to cover 90% of health care costs for all employees who work over 20 hours per week." When employees are proud to work for a company their commitment to achieving high quality standards also increases.

I will end this post with two more quotes from my textbook that show the sales benefits of companies behaving in socially responsible and ethical ways.

"A Cone Cause Evolution study revealed that two-thirds of Americans consider a company's business practices when making purchasing decisions, with 85% claiming that they would switch products or services should a company be revealed to be unethical."

"Research by the brand and marketing agency BBMG revealed that about 3 out of 4 Americans prefer to buy goods and services from firms that are socially responsible and good corporate citizens."