Three Types of Socially Responsible Organizations

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Three Types of Socially Responsible Organizations
Anneke Zwart, Moderator
Ferrell and Thorne-LeClair distinguish three types of socially responsible companies:
1. OPEN-HANDLERS ORGANIZATIONS: within those three types, this type of organizations carry the highest level of corporate consciousness
2. PRACTICE-WHAT-THEY-PREACH COMPANIES: the second type of organization are less conscious than open-handlers organizations, however they are committed to particular causes/philanthropic actions on a long-term bases
3. IMAGE-BUILDER ORGANIZATIONS: this type or organizations is engaged in cause-related marketing, which refers to partnerships between a for-profit and a non-profit organization/foundation/charity or other public cause that yield mutual benefits. Money spent in cause-related marketing is expected to show a return.
Source: Powerpoint, L. Ferrell and D. Thorne LeClair.

CSR Image Builder Organizations
Ismael Bena - MBA, SIG Leader
Interesting observation, given the objective of the company each of the three categories can be pursued.
In principle, Customer Relationship Management (CRM) has the ability to increase revenue, enhance image and create employee buy-in.
Although, the "image builder organizations" may not always see the return expected, as this strategy is often aimed to attract consumers who want to make a difference through their purchase. Collins (1993) argued, “… it [CRM] can generate the long-term value needed for a company to survive and achieve competitive advantage”.
Skepticism on this strategy is that consumers are getting more concerned and conduct research on companies and their social intentions. If CSR is reputation driven, consumers might shy away, knowing that favorable reputation enables firms to charge premium prices and advance their corporate position more than their social cause, as “Well-reputed firms have a competitive advantage within there industries” (Fombrun and Shanley 1990).

Abandon the Third Type of Corporate Social Responsibility
Leodegardo M. Pruna, Member
Of the three types mentioned, I prefer the first and second: practice what the organization preaches. It cannot be that an organization, through its marketing strategies, is saying one thing about its product or services, but is doing another thing just to raise its profitability and even net worth.
An organization should practice ethics and be as honest and truthful in projecting its capability to satisfy its customers and stakeholders. I definitely would be in and doing the first or second rather than the third one.



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Special Interest Group Leader
Ismael Bena - MBA
Management Consultant

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