Xiao-Yun Gong

Xiao-Yun Gong

Word count- 1,784/PIN- E10351

1

When Corporate Social Responsibility (CSR) confronts with Public Dissatisfaction

There was a boycott international company wave in China during the Sichuan earthquake

period in May 2008. It started with Procter & Gamble announced to donate a million RMB to

disaster area, which had a sharp contrast to another hundred million RMB donation from the local JDB Group. Public blame those international companies lack of Corporate Social

Responsibility (CSR), because the amount of donation is disproportionate with their profit in

Chinese market. Nowadays, media and public have higher and higher standards and more and more fastidious about company implementing their social responsibility. Theoretically, like

this humanitarian assistance to Sichuan earthquake, government should take all the

responsibilities for Post-disaster reconstruction. However those problems sometimes are too urgent to wait, therefore public hope corporations can take care of them.

Milton Friedman as an American economist devoted his whole life to promote economic freedom theory. From his standpoint, he thinks that there exists a dilemma in CSR: CSR

executor has direct responsibility to its employers, which general will be to make as much

money as possible. If these social responsibilities are spending company‟s own money, time or energy that is fine, on the contrary, reduce returns to stockholders, raise the price to

customers, insofar as his actions lower the wages of some employees that use of the cloak of

social responsibility does clearly harm the foundations of a free society. He believes there is one and only one social responsibility of business that is to use it resources and engage in

activities designed to increase its profits1. Laissez-faire also advocates argue that corporations

should only be responsible to obey the law and to maximize shareholder value2. There is no such thing as a „good company‟ that is not profitable3. Heath and Ryan contrast between three

different approaches to setting the social responsibility of the corporation: moral rectitude,

image building and public consultation4. Even though they involve the moral rectitude in, image building and public consultation still have strong profit orientation; they more concern

1 Milton Friedman, The Social Responsibility of Business is to Increase its Profits (The New York Time

Magazine, September 13, 1970). 2 Robert J.Eaton, “In Defense of the CEO”, (Public Relat ions Strategist 2 (2) , Summer 1996), pp.6-11 3 Nell Minow, “Downsizing Corporate Responsibility”, (Public Relations Strategis t 2 (2), Fall 1996),

pp.15-16 4 Robert L.Heath and Michael R.Ryan, “Public Relations Role in Defining Corporate Social

Responsibility”, (Journal of Mass Media Ethics 4 (1) , 1989), pp.21-38

Xiao-Yun Gong

Global Initiatives Symposium in Taiwan 2009

Xiao-Yun Gong


2

the company but not purely focus on social benefit. Generally, the economists believe that the

primary mission for a corporation is making money.

However, public do not hold the same opinion with corporations and economists. There was a

survey which obtained two different ranking lists by Chinese corporation and public as

following.

The importance ranking of CSR5

Rank by corporations: Rank by public 1 Rapid develop ment, keep profitable 1 Reduce pollution

2 Donate to society 2 Employee welfare and working environment

3 Employee welfare and working environment 3 Product quality and after service

4 Product quality and after service 4 Provid ing employment for vulnerab le groups

5 Providing employment fo r vulnerable groups 5 Pay taxes

6 Keep good relationship between other companies 6 Rapid development, keep profitable

7 Pay taxes 7 Donate to society (money and commodit ies)

8 Reduce pollution 8 Keep good relationship between other companies

Apparently, corporations treat CSR more trend to legal aspect, which means keeping company

rapidly developing is their primary goal. On the contrary, public more emphasize on the moral

aspect, which reflects on the top one - reduce pollution. Since public treat the help for problem outside of company is the meaning of CSR, companies have to have some actions,

for instance donate money, build schools and control pollutions in order to establish a positive

image to gain more support from public. And then, based on this support they gain loyal customers and get more profit. Therefore, it is hard for public to distinguish the difference

between do CSR for social reason or for corporations‟ own good. This difference is the source

of public fastidious on CSR operation, which also makes public expect corporations do more for society when they show better market performance.

5 http://news.sina.com.cn/c/2007-01-04/213411953964.shtml The survey had done by Peking University

Market Economy Academy, Global Entrepreneur and Horizon Research Company, which has 980 companies

and 3201 cit izens (who represent the public) part icipated in 2007

Rethinking of Corporate Social Responsibility (CSR) and Social Entrepreneurship


3

Corporations want to get high value of their behavior and build positive company image,

which all can track by public opinion. Public opinion is a very important component, which is

influenced by the effects of information conveying. What is „public opinion‟? It should be explained separately. First the core word ‟opinion‟, in the beginning of this conception was

created, it used to point to a judgment which usually refers to facts. And for the word „public‟,

this term has two particular means, which are „the people‟ and „public place‟6. Hence, public opinion contains the fact and wildly agreement. Moreover, s tart from 18th century, begin in

Europe, the growth of capitalism and the ascendancy of a European bourgeoisie resulted in a

reasoning public sphere. At that time public opinion leaded to discussion and to the free flow of information to reflect common good also representative democracy. 7 Afterward public

opinion represents free opinions without supreme power intervention, which can be seen as

the real feedback from public.

The graph below shows how the public opinion be shaped8.

Public affairs Mass Media

Discussion

Public Opinion

Follow the frame above, Public Opinion has profoundly influenced by media effects and also,

the interpersonal contact (discussion) has consequential power over attitude change and persuasion. Therefore, mass media and interpersonal contact are essential influence factors

during CSR implementation procedure.

Generally, CSR should be a daily responsibility to fulfill (such as keeping profitable and

employee welfare). However, usually the special issues can have attention and then get public

opinion as reaction. Since the general publics usually get information from media, draw support from media broadcast is indispensible. Actually, media cannot control the way people

think, but it is successful in telling them what to think about, which means media sets their

6 Vincent Price, Public Opinion (Sage Publicat ions, Californ ia Unite states, 1992), P6-7

7 Vincent Price, Public Opinion (Sage Publications, California Unite states , 1992), P9 8 Silvo Lenart, SHAPING POLITICSL STTITUDES – The Impact of Interpersonal Communication and

Mass Media (Sage Publications, California United States of America, 1994), P5


Xiao-Yun GongWord count- 1,784/PIN- E10351

4

audiences agendas. Media does not have strong influence on shaping audience‟s attitude;

however, it can lead the way, showing audience the topics to ponder over. If opposite topics

are full of coverage, people will only remind those defects. Under this circumstance, companies should try to make a win-win relationship with media so as to let positive events

be exposed. To some extent, running media is also running a business - rating is crucial.

Trying to seek an attractive CSR campaign theme to catch public notice is mutual beneficial for both corporation and media. Moreover, media have two functions for their audiences, one

is surveillance function the other is correlation function9. The information corporations want

to transmit to public should be truthful and reliable. And then media collects feedbacks from public, pick some of them return to public try to find the dominant opinion. In this period,

corporations have the chance to follow latest public opinion and modify their media strategy

to lead public forming the most favorable opinion for corporations.

There are three levels of interpersonal influence: Person-to-Person influence, Group level

influence and Opinion Climate Influence10. Commonsense, it is really hard to control or amend everyone‟s thought, establish proper opinion Climate then penetrate into groups will

maximum the effect. Furthermore, individuals fear social isolation, in order to avoid it, they

search for the dominant opinion as their own and may even detect minority ones. Therefore, using media to create a favorable opinion climate is vital, corporations should try to let

“willing sacrifice for social good” be the opinion climate. Since it is impossible to convey

CSR activities to every member in general publics, and based on the susceptibility to persuasion theory, corporation had better win those active public. The term elite is often used

to refer to these most active members of the population, which means active public is those

opinion leaders. They talk, persuade and influence general publics‟ opinion. Moreover they are the knowledge supplier, which further emphasize the importance of elite in society. Since

people learn from experts, the opinion leader‟s voice is strong, should be fairly utilized. Get

support from those leaders or let them be spokesman for company and use attractive points to get public attention, gain high rating and create favorable opinion climate, adjust their

prejudices and then make this in a virtuous circle

9 Vincent Price, Public Opinion (Sage Publications, California Unite states, 1992), P80 10 Silvo Lenart, SHAPING POLITICSL STTITUDES – The Impact of Interpersonal Communication and Mass Media (Sage Publications, California United States of America, 1994), P18

Rethinking of Corporate Social Responsibility (CSR) and Social Entrepreneurship


5

Besides, group is a network of communication, group members search dependent and share

their opinions, attitudes and values. If someone in a group rises an opposite idea may spread

widely as this group‟s dominant one and then grow bigger reshaping the whole opinion climate. Hence, the minority demur cannot be ignored. Moreover, if media‟s coverage of

corporation‟s CSR campaign makes respondents feel good, and this is associated with a

positive effect on preferences for this image, a strong media effect will be made for the affective response that may then change their bias11. However, there is a problem that

although the content may positive enough to elicit negative projections onto the media, the

affective response may simply do the opposite, that of eliciting positive projections. So the guideline for corporation is that does not practice CSR so intentional to stimulate the opposite

abomination and constantly prepare crisis control. Back to the moral source of CSR: do things

for social, if corporations really mean that, public will feel the sincere and show their positive opinions.

To sum up, although economists and public take different thought on importance ranking of corporate social responsibility, they all desire corporations contribute to society. Therefore, do

CSR sincerely and attractive, use media to advocate, get opinion leaders‟ support, timely keep

adjusting strategy by public feedback. At last, vigilance for potential threat, avoid opposite bias become dominant ones. Since corporations get high valued confirmation from public

which directly reflects on high support proportion, they can gain more profit and then

contribute more to society, which is an ideal virtuous circle.

11 Silvo Lenart, SHAPING POLITICSL STTITUDES – The Impact of Interpersonal Communication and Mass Media (Sage Publications, California United States of America, 1994), P82


Xiao-Yun Gong


6

Reference Milton Friedman, The Social Responsibility of Business is to Increase its Profits (The New

York Time Magazine, September 13, 1970). Robert J.Eaton, “In Defense of the CEO”, (Public Relations Strategist 2 (2) , Summer 1996) Nell Minow, “Downsizing Corporate Responsibility”, (Public Relations Strategist 2 (2), Fall

1996)

Robert L.Heath and Michael R.Ryan, “Public Relations Role in Defining Corporate Social Responsibility”, (Journal of Mass Media Ethics 4 (1) , 1989)

http://news.sina.com.cn/c/2007-01-04/213411953964.shtml Jan. 4th, 2007 Vincent Price, Public Opinion (Sage Publications, California Unite states, 1992) Silvo Lenart, SHAPING POLITICSL STTITUDES – The Impact of Interpersonal

Communication and Mass Media (Sage Publications, California United States of America, 1994)

Documents

Xiao-Yun Gong