Chapter 13: Social and Ethical
Strategies
Structure
A. INTRODUCTION
1. Overview and Strategy Blueprint
2. Marketing Strategy: Analysis &
perspectives
C. WHERE DO WE WANT TO BE?
B. WHERE ARE WE NOW?
3. Environmental & Internal Analysis:
Market Information & Intelligence
4. Strategic Marketing Decisions,
Choices & Mistakes
5. Segmentation, Targeting
& Positioning Strategies
6. Branding Strategies
7. Relational & Sustainability
Strategies
D. HOW WILL WE GET THERE?
E. DID WE GET THERE?
14. Strategy Implementation, Control
& Metrics
8. Product Innovation & Development
Strategies
9. Service Marketing Strategies
10. Pricing & Distribution
11. Marketing Communications
12. E-Marketing Strategies
13. Social and Ethical Strategies
Learning Objectives
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Examine the nature of social marketing and its implications.
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Provide a comparison between the interests of shareholders as opposed to the
firm’s stakeholders.
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Discuss environmental/green marketing and social marketing as firm initiatives.
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Discuss ethics and moral judgment and the firm’s actions as a morally responsible
organization in society.
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Explain the various facets of corporate social responsibility.
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Explain philanthropic activities and initiatives and cause-related marketing strategic
choices.
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Illustrate the ways in which a firm can get involved in socially-responsible activities
to improve its standing as a hands-on and caring community citizen.

Examine the ways in which the CSR strategist can make social responsibility
meaningful for the firm by making it a strategic imperative as opposed to an act of
compliance.
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Discuss ways in which social responsibility can be measured and evaluated.
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To examine the newest initiatives for CSR strategists to improve their performance
involving the Virtue Matrix and the addressing of global poverty through
partnerships between corporations and NGOs.
Introduction
• The wants and needs of society are an important
contextual consideration
• Firms must not only produce excellent goods and
services, but also concerned with their relationship with
society at large as well as with environment
• Consumers want organizations to act legally and
ethically
• Companies must now be socially responsible
The Firm and Its Role in Society
Shareholders vs. stakeholders
• Stakeholders are all those groups or publics
that interact with and are affected by the
operations of the firm and include:
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Employees
Partners
Suppliers
Customers
Community members
Governmental agencies and
Social activist groups (see Figure 13.1).
Figure 13.1: Various Company Stakeholders
Social marketing
• The application of marketing principles and practices to help
with the resolution of public health and social problems.
• Two important facilitators for social improvements have been the
internal pressures in a variety of countries to address
consumerism and environmentalism.
• Environmental/green marketing involves the actions undertaken
by the firm or donations that are aimed at improving or
preserving the environment surrounding the firm. Green
marketing focuses on the idea of keeping the environment clean
and green.
• Many companies now look to ensuring not only that their own
practices are environmentally sound but that their suppliers and
customers should be environmental stewards as well.
Corporate ethicality
• Ethics is the set of moral principles or values that shape the
actions of either an individual or a group of individuals.
• Ethical principles therefore set a standard for behaviour in a
society. Legality sets the foundation for what behaviours are
seen as lawful or unlawful, but ethics focuses more on moral
judgment, and the focus becomes is something the right thing to
do from a moral standpoint as opposed to whether it is lawful or
not.
• Moral judgment is the framework of beliefs upon which the
individual makes judgments on whether action is morally
appropriate or not.
Corporate social responsibility
• The actions of the company to act in a socially-responsible manner
to protect and enhance the various stakeholders that have an
interest in the company, the community in which it operates, the
environment which surrounds it, and society (see Figure 13.2).
• One important caution for global companies at this point is that
different cultures may have different perceptions of the use of the
importance of different levels of corporate social responsibility
initiatives.
Figure 13.2: Corporate Social Responsibility
Activities
Corporate philanthropy
• Corporate giving to charitable organisations
• Porter & Kramer (2002) suggest that charitable giving can be
used to improve an organisation’s “competitive context”
• Philanthropy can be used to merge social goals and economic
goals
• Cause-related marketing involves a linking up between the
corporation and a particular charitable cause. There are two
ways that this can happen, the company can make
unconditional donations on a regular basis to a particular
charitable cause, or it can link its donations to customer
purchase behaviour.
Corporate philanthropy
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Sasse and Trahan (2007) suggest that corporate managers should
carefully consider the basic tradeoffs before committing any valuable
corporate resources to social causes.
Executives should follow four key guidelines when considering
philanthropic activities:
– Managers should be wary of any philanthropic expenditures that have
unclear values or methods for determining pricing
– Managers should never underestimate or overestimate the benefits to
company reputation that can be accrued through philanthropic spending (in
particular, overhyping CSR can foster cynicism as opposed to goodwill)
– Managers should realize that even for very large corporations there must be
clear spending limits set for philanthropic endeavors
– Managers should determine whether the philanthropic activities being
considered limit the individual choices available for primary stakeholders
(like diminishing individual volunteerism).
Social activism and community involvement
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The actions undertaken by a firm, individuals or a group that are aimed
at making the quality of life in society better for all the inhabitants (see
Figure 13.3).
From a firm strategy perspective, this would often involve some kind of
proactive role in improving the community in which the firm operates.
One possibility is partnering with NGOs.
NGOs are activist organizations that work for particular causes.
When faced with NGO pressure a firm has three strategic choices:
– Pre-emption
– Capitulation
– Resistance.
Figure 13.3: Varieties of Levels and Mechanisms for
Corporate Social Activism
Social activism and community involvement
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Hess et al (2002) examined a number of recent successful corporate
initiatives and found that they had three things in common
– They were connected to the core values of the firm
– Built upon the core competencies
– The CSI program undertaken were reviewed and evaluated.
This represents a shift from seeing only company shareholders to
viewing all stakeholders.
Companies must measure their CSR initiatives through a social audit.
Firms must not do it for the sake of doing it, they must be committed to
it.
CSR must be an integral part of their strategic planning process.
Moving CSR from compliance to strategic
imperative
• CSR is not just giving money to charity, it involves such
issues as human rights, environmental stewardship, familyfriendly work conditions and community development.
• Many managers still seem to be sceptical about the
importance of CSR.
• High performing businesses did show a strong correlation
between CSR activities and stronger performance in terms of
productivity as well as profitability when compared to other
firms.
• The key is to make CSR a part of the corporate planning
process.
Moving CSR from compliance to
strategic imperative
• Porter and Kramer (2006) argue that there are now four
prevailing justifications for CSR:
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(1) moral obligation,
(2) sustainability,
(3) license to operate, and
(4) reputation.
• All four of these justifications are limited since they centre more
on the discrepancies between the business and society than on
the codependency of the two. As a result no single justification
is sufficient from this list.
• An appropriate social agenda for a company should not try to
solve all of the problems faced by society, but it should fit with
and reinforce company strategy through social advancement
(see Figure 13.4).
Moving CSR from compliance to
strategic imperative
• Husted and Allen (2007) provided an interesting
follow-up to the suggestions of Porter and Kramer
(2006) with a comparison of traditional CSR, strategic
CSR and Traditional Strategy (see Figure 13.5).
• They address the differences across five important
strategic dimensions:
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Visibility,
Appropriability,
Voluntarism,
Centrality, and
Proactivity.
The latest thinking: The Virtue Matrix
• Roger L. Martin (2002) argues that corporate
management must deal with a series of obstacles when
attempting to position their companies as better
community citizens
• Virtue Matrix allows the user to understand the forces
that affect demand and supply
• He divides CSR into two components
– Instrumental
– Intrinsic
The latest thinking: The Virtue Matrix
• The matrix is divided into four quadrants
– The two lower quadrants comprise the civil foundation
– The left lower quadrant includes conduct that is undertaken by
choice
– The lower right quadrant includes those actions that are
mandated by law
– The upper left quadrant is the strategic frontier
– The upper right quadrant is the structural frontier
• Biggest barrier to corporate virtue is the lack of vision
• Consumer agitation and peer group encouragement can help
The latest thinking:
The New Social Compact
• Brugmann and Prahald (2007) argue that companies and social
activists are beginning to work together in meaningful ways to
develop completely new business models that will help to improve
companies and the poor globally.
• They suggest that there are great synergies between major
corporations and NGOs in relation to their particular competencies,
infrastructures and understanding of what is happening in lowincome areas of the world.
Conclusion
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Firms can no longer think of themselves in isolation from the forces and
publics around them.
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The company of today must pay attention to a number of relevant publics
including employees, suppliers, partners, community groups, and social
activists.
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CSR managers must weave initiatives into the basic fabric of the
organization, and CSR must be a process that is endorsed by top
management.
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When done the right way, it will not only improve the image of the firm, it will
also improve productivity and profitability.
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Good corporate citizenship is well worth the effort, but it must be tied to the
skills, abilities, competencies and values of the firm.