Business Communication Chapter 5 Corporate Responsibility Teaching Notes Corporate Responsibility After Integrating Aspects Corporate

Chapter 05 – Corporate Responsibility

Teaching Notes

Chapter 5

Corporate Responsibility

. After integrating aspects of corporate responsibility into my research and teaching

for the past few years, it has become evident to me that the idea of “companies doing

well by doing good” has passed the tipping point in today’s business world. This

realization, and a genuine personal interest and teaching focus in this area, has

spurred me to include an entire chapter on corporate responsibility and its

implications for the corporate communication function. Given how important this

has become to businesses over the last few years, and how often CSR is connected to

corporate communication, you will be one step ahead of your students by adding

this to the curriculum. I now teach a separate elective on this subject here at the

Tuck School.

If your students are anything like the MBA students I have the pleasure of teaching

at Tuck, however, they too are likely to be optimistic, passionate, and innovative in

their thinking about the convergence of business and society and about the

importance of corporate responsibility. For this reason, I find it both relatively

Introducing the area to students

When first introducing the subject to the class, I usually start by posing the question

that stems from Milton Friedman’s writing on the topic (discussed in Chapter Five) –

is it true that the social responsibility of business is only to increase its profits? It is

impossible not to initiate a hearty class discussion with this starting point and every

class I’ve ever taught has had students on both ends of the spectrum in terms of

their beliefs.

Try to lead the discussion in such a way that you encourage students to consider a

company’s core constituents – how do you determine which of these is most

important? If you donate a significant amount of corporate funds to a local charity, is

that fair to investors who are looking for ROI? How do you choose between sourcing

your products from a very inexpensive factory in Southeast Asia that might have

questionable labor practices and a factory in the US that is ten times as expensive

when it will directly affect your product prices and bottom line? By using this

starting point, you make it clear that the issue of corporate responsibility is not just

a “passing fad” as some tend to think but presents real business strategy decisions

Chapter 05 – Corporate Responsibility

Teaching Notes

that are at the core of a company’s image, identity, reputation, operations, and

communication strategy.

It is also useful to ask students to list corporate responsibility efforts taken by

businesses in your local community or by companies that they have worked for in

Again, as I emphasized in Chapter Three, for corporate responsibility issues, you

have an opportunity to partner with a colleague at your school who specializes in

this area or sustainability. Many schools also offer courses on business and society

that intersect with this part of the book. In addition to the articles referenced in the

text itself, look for books coming out in this new area virtually every month.

Philanthropy may only come up in this class, so you may want to say a bit more than

I have in the book. What is the philanthropic nature of the companies in your local

community? Do they follow any kind of discernible strategy? If not, get students

thinking about what they would suggest. Community relations is similar to, but

different from, philanthropy. How are companies perceived in your school’s

community? In what way do businesses ‘give back’ to their community? ‘Giving

back’ can include more than simply generating jobs or tax revenues; a company

might sponsor charitable events, offer local discounts or organize employees to

donate volunteer hours. Often students can think of other more creative ways that

companies preserve good community relations.

Communicating about corporate responsibility

The reason that this chapter is in a book about corporate communications is

because the real value to a company in engaging in responsible business practices

comes not only from the actual activities carried out but from the communication

and conveyance of these activities to its core constituents. It is important for

students to again return to a framework introduced in Chapter Two for

distinguishing between constituents. In the case of corporate responsibility, each

Chapter 05 – Corporate Responsibility

Teaching Notes

prior written consent of McGraw-Hill Education

Other thoughts

The Internet, as always, is a fantastic source for students to learn about corporate

responsibility and to see it in action at companies. Have students explore the

corporate responsibility reports and websites for companies with strong programs

such as McDonald’s, Nike, Dell, Timberland and Green Mountain Coffee Roasters.

Look for stories of personal engagement with these brands from your students in a

way that relates to corporate responsibility. Have they tried Green Mountain’s fair

trade coffee? Have they run a Nike race that raises money for charity? Do they notice

the recyclable packaging at McDonald’s? Ask students what they view as believable

and genuine and what they view as “marketing speak” as they read companies’

reports on the corporate responsibility efforts. Finally, have students brainstorm

about what else companies should be considering. What are the risk factors and

reputational issues in this area? What else should companies consider doing to

become more sustainable and responsible? The challenge here is to make this

discussion not just about environmentalism or philanthropy, but to relate it back to

the company’s core business and operating strategy.

The Starbucks case in Chapter Five is a rich case that is one of my favorites to teach.

In my mind, it is the ideal case to use to introduce the area of corporate

responsibility to your students in a tangible and familiar way. However, do not be

fooled by the familiarity of the Starbucks brand – this is a challenging case that

should initiate many discussions related to communications strategy, NGO

Chapter 05 – Corporate Responsibility

Teaching Notes

Teaching Note

Starbucks

Overview

The Starbucks Coffee Company case offers students an opportunity to explore the

tradeoffs between a successful business strategy (in this case, its focus on the

purchase of the highest quality coffee, which is at the heart of this business) and the

company’s interest in maintaining and enhancing its reputation as a socially

Questions to Begin the Case Discussion

Students can approach this complicated case from many different angles, so

questions should be tailored to the individual needs of the course you are teaching.

Possible successful approaches include the following:

1. Focus on the factors in the environment affecting Starbucks’ decision.

This allows you to explore comparison between Nike in the 1990s and

Starbucks today. The company faces the risk of overexposure because of its

incredible rate of growth. And, like Wal-Mart, the company has been seen as

2. Focus on Starbucks’ image and identity specifically. How will this

decision affect Starbucks’ reputation? Students will be able to see quickly

that the company’s focus on quality may suffer if it chooses to sell fair trade

coffee unless it is able to maintain a consistent level of quality. This can get

into discussions of what drives the Starbucks brand and how much a part of

that brand is the quality of the product itself.

Chapter 05 – Corporate Responsibility

Teaching Notes

3. Focus on what constituencies would be most affected by Smith’s

decision. Smith had to consider how all of his constituencies would respond

to this situation. So, while some internal managers (see Mary Williams, who

is in charge of the coffee business, in particular here) might not want to

4. Focus on what kinds of corporate mistakes the company is likely to

make depending on Smith’s choice. For example, if he chooses to support

fair trade, what will happen to relationships the company currently has with

suppliers? If he decides to support Global Exchange, will other NGOs come

after the company (for example, to sell non-genetically modified milk, or

some other cause-related activity).

5. Focus on how this might play out in the media. What is the headline likely

to be depending on Smith’s decision? How will this affect each of the

company’s key constituencies? What kind of damage did Nike suffer at the

hands of the adept Global Exchange in its attempt to depict the company as

an employer of child laborers in developing nations in Asia?

6. Focus on what kind of corporate communication strategy the company

should develop no matter what its decision in this case. Students need to

focus on how the company can communicate its strategy once the decision

has been made. Some constituencies will be happier with one decision more

How to Analyze this from a Crisis Communication Perspective

One way to think about this case is that you need to prepare for the worst, as a

follow-up to the last question discussed above. So getting students to think about

what you might do to prepare for the possibility that things can go wrong will

generate a very rich discussion and help prepare the company for a potential crisis.

Here are some of the potential steps the company could take:

• Communicate directly and frequently with all employees by memos,

webcasts, emails, etc.

Chapter 05 – Corporate Responsibility

Teaching Notes

prior written consent of McGraw-Hill Education

• Add substantial content to the website on this topic. Nike did a good job of

communicating through its website on labor issues (albeit a bit too late).

• Appoint a team to synthesize information gathered from consumers and

determine whether the company’s actions are having the desired effect.

In addition, discuss the following crisis preparation plan:

1. Assess the organizational risk. As Nike discovered, even the most socially

minded companies are at risk (maybe more risk because they have set

themselves up to be examples) from a smear campaign by the Global

2. Set communication objectives, targets, and channel choice. The company

must determine what objectives it hopes to achieve with its PR campaign,

what constituencies it is targeting, and how best to communicate its message

along these lines.

3. Assemble the team and centralize responsibility. The company has to put

a team in place for any eventuality. Preferably, this team should include

4. Leverage Starbucks goodwill. The company has earned a great reputation

over the years through delivering quality products in a socially responsible

manner. This will carry it along way no matter what decision management

makes relative to fair trade.

5. Use third-party advocates. The company must make use of third party

Chapter 05 – Corporate Responsibility

Teaching Notes

6. Get whatever you can on the Global Exchange. The company needs to do

its homework on this incredibly adept antagonist. The public, by the time of

the case, had seen the havoc that anti-globalization marchers caused at WTO

rallies and other similar events. While the case predates 9/11, today there is

a pronounced public backlash against anti-American groups that pursue

radical agendas through disruptive means in the United States (may look

very different abroad).

What Really Happened

Starbucks decided to sell fair trade coffee, and meet many of Global Exchange’s

demands. Almost immediately, Global Exchange backed off and started to pursue

other larger companies in the industry, like Procter and Gamble and Kraft General